Uber’s Chinese rival Didi Chuxing Technology Co. is fast going up in the sharing economy with a valuation close to US$28 billion after it raised US$4.5 billion in a round of funding.
That puts the ride-hailing company above US short-term rental giant Airbnb Inc. and a step closer to Uber, the world’s most valuable closely held company which is worth US$68 billion, Bloomberg reports.
Didi’s newly earned valuation makes it the world’s third largest privately backed young company. Chinese mass-market smartphone maker Xiaomi Corp. is No. 2, according to data from research firm CB Insights.
Didi was valued at US$16.5 billion last year. It closed its latest round of funding with the help of Apple Inc. and prominent Chinese investors, including the nation’s top life insurer, according to sources cited by Bloomberg.
The Beijing-based company also snagged a US$2.5 billion debt package from China Merchants Bank Co. on top of the fundraising, the Wall Street Journal reported earlier, citing a person familiar with the matter. Didi declined to comment.
Didi, which has formed a global coalition with Lyft Inc. in the US, India’s Ola and Southeast Asia’s Grab, is trying to fend off an aggressive charge by Uber onto its home turf.
Both companies are amassing cash and spending aggressively to expand in the world’s second-largest economy, partly by subsidizing the costs of rides.
Backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd. — China’s two most valuable technology companies — Didi is targeting an initial public offering in New York next year, people familiar with the matter have said.
The timing depends on how the tussle with Uber plays out, the people said.
Uber is spending at least US$1 billion a year in China and has raised capital there that, as of January, valued the Chinese operations at US$7 billion.
It recently raised US$3.5 billion from Saudi Arabia’s sovereign wealth fund — the single biggest investment in the company to date, according to Bloomberg.
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