Taxi App War: Uber's Competitor in China Raises $1.5 Billion
Uber has been scaling the ranks of the ride-hailing world in the U.S. But it’s looking like the company may have met its match in China.
The largest and most formidable Uber competitor in China, Didi Kuaidi, is raising $1.5 billion, according to a report from Reuters. The raise is based on a valuation of the newly merged company at between $12 billion and $15 billion. In February, Didi Dache and another ride-hailing service, Kuaidi Dache, merged under the name Didi Kuaidi.
The news of the Didi Kuaidi raise comes just days after the Financial Times leaked investor documents from Uber indicating that the San Francisco-based giant was looking to put $1 billion toward conquering the market in China in 2015.
Uber is available in more than 300 cities and nearly 60 countries, but the investor letter from founder and CEO Travis Kalanick makes it sound as though everything so far has been child’s play compared to the growth expected in China.
UberChina launched in February 2014 and the ridesharing option, People’s Uber, similar to the UberX option available here in the U.S., launched in October. Uber says it is completing one million trips per day in China. To put that in perspective, Uber says that at nine months into operation in the Chinese city of Chengdu, Uber completed 479 times the number of rides that Uber had completed in New York City nine months into the company’s launch in the Big Apple.
“To put it frankly, China represents one of the largest untapped opportunities for Uber, potentially larger than the U.S.,” Kalanick wrote in the letter to investors. “Success in China, however, takes commitment over the long haul and a strong will, coupled with a unique understanding of the differences in China.”
Kalanick says that Uber will compete aggressively to win in the Chinese rides-hailing markets. “We at Uber pride ourselves on being fierce and principled competitors -- we plan to succeed by continuing to win the hearts and minds of riders and drivers with a superior product experience.”Related: Finland's Capital Wants to Do Away With Car Ownership
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.