Wed, Mar 29, 2017 - Page 10 News List

Didi mulling Softbank funding: sources

LOOKING AHEAD:The ride-sharing giant’s business remains constrained by strict rules in numerous cities and it needs capital to expand research into driverless cars


Chinese ride-sharing giant Didi Chuxing (滴滴出行) is weighing whether to take a US$6 billion investment backed by SoftBank Group Corp that could dilute existing backers, such as Apple Inc, people familiar with the matter said.

If the deal goes through, the funding would be the single largest for a Chinese technology start-up on record.

However, the Beijing-based company that ousted Uber Technologies Inc from China now needs to balance the interests of its more than 100 investors, including Alibaba Group Holding Ltd (阿里巴巴) and China’s sovereign wealth fund, said the people, who asked not to be named, because the matter is private.

Chinese social media giant Tencent Holdings Ltd (騰訊) and Apple are considering whether they should join the investment on a pro rata basis to avoid a dilution of their stakes, the people said.

It was unclear if the money would be coming from the Japanese company itself or its yet-to-close US$100 billion SoftBank Vision Fund.

Didi, which last year amassed US$10 billion in cash and equivalents, will need to decide whether it will take the additional funds as it locks horns with Uber and Alphabet Inc in the development of driverless technology.

The company is currently coping with stringent regulations limiting the number of private cars and drivers it operates, a regulatory uncertainty that might delay its timeline for an initial public offering, the people said.

Didi spokeswoman Sun Liang (孫亮), Tencent spokeswoman Canny Lo (羅琳) and Apple spokeswoman Carolyn Wu (吳純) did not respond to requests for comment on funding.

SoftBank spokesman Matthew Nicholson declined to comment.

Billionaire SoftBank chairman Masayoshi Son is trying to close the Vision Fund, backed by his own company along with money from Saudi Arabia and Abu Dhabi’s Mubadala Development Co.

Apple, Qualcomm Inc and Oracle Corp chairman Larry Ellison might invest US$1 billion each in the fund, people familiar with the matter have said.

The fund’s mandate is to back next-generation technologies, such as artificial intelligence and the Internet of Things.

SoftBank is already a backer of Didi’s, but Son might now be doubling down on a bet that technology will transform transportation in China — the same way he gambled on e-commerce giant Alibaba and shifts in domestic consumption.

“The car-hailing business might be limited in market size, but if you look at the entire transport industry and possibilities, then Didi is very well positioned,” said Zhou Xin (周鑫), an Internet consultant at Beijing-based Trustdata. “Son bet on Alibaba years ago for the potential consumption upgrade that China would experience, investing in Didi would follow the same philosophy.”

Didi, led by CEO Cheng Wei (程維), became China’s ride-sharing leader after buying out Uber’s domestic operations. As it does not charge taxi drivers any fees, the bulk of its revenue comes from taking a commission from rides in private cars and limos — a sector that has been hampered by stricter qualification requirements for drivers and cars.

Earlier this month, it won an operating license from the Tianjin city government, affirming its right to legally operate in China.

However, business in cities including Beijing and Shanghai remains dogged by stricter rules that, for example, require drivers to have local residency to operate.

This story has been viewed 3560 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top