Deals | News Flash: Didi Scores $4 Billion Investment to Beef up AI, Global Market Expansion and EVs

The ride-hailing company raises its cash reserves up to $12 billion.

Didi Chuxing, China’s top ride-hailing company, announced today it has raised $4 billion in a new equity financing round, envisioning international expansion, development in AI technologies, and investment in new energy vehicles.

This financing round was joined by SoftBank and Mubadala. Involved companies have signed agreements before dawn today. Following the deal, the ride-hailing company raises its cash reserves up to $12 billion.

According to Didi Chuxing, this round has been backed by both domestic and overseas institutions, as they approve of the company’s strategic insights and management skills.

The injection gives the Beijing-based company ample money to flex its muscles in the global market, providing services to more overseas users. As the Chinese market is very much stabilized, Didi Chuxing has to go out and find opportunities, most likely starting in Southeast Asia countries like Vietnam and Malaysia, said Will Tao in an interview with Bloomberg.

The company also plans to use the money it just raised to ramp up its bet in smart transportation and EV services, pushing for the innovation in the transportation space. Accordingly, the company seeks to enrich its AI talent pool and invest more in AI technologies.

Didi Chuxing closed its previous funding round worth over $5.5 billion on April 28th, 2017. China Merchant Bank, SoftBank China, Silver Laker Partners, Russia-China Investment Fund and Bank of Communication participated in that round. The company was valued at over $50 million post-deal.

That means the ride-hailing company has mopped up around $9.5 billion to $10,5 billion through its two funding rounds in 2017, while U.S. market has seen the total 37 tech IPOs raising $9.9 billion, according to Renaissance Capital. That means Didi Chuxing’s two rounds exceeds the total amount of U.S. tech IPOs that happened this year.

So far, Didi Chuxing has banked over $16.8 billion through 16 funding rounds, participated by 34 institutions and personal investors, according to ITjuzi. The latest round raises its total financing amount to over $20 billion.

Post the latest round, Didi Chuxing’s valuation has been pushed to about $56 billion, while Uber’s market capitalization has shrunk 30% to $48 billion, until the end of November, according to Bloomberg’s source familiar with the matter.

At the same time, the latest round suggests Didi Chuxing is unlikely to seek an IPO and make a profit in large scale in the near future, while its most prominent rival Uber is eyeing an IPO in 2018.