Didi Is Raising Money for Self-Driving Unit at $6 Billion Value
(Bloomberg) -- Ride-hailing giant Didi Chuxing is raising new funds for its self-driving unit as China’s answer to Uber attempts to supercharge growth beyond its core businesses ahead of an anticipated initial public offering this year.
Didi Autonomous Driving is planning to raise as much as $500 million at a valuation of roughly $6 billion, people familiar with the matter said, asking not to be identified discussing private matters. The new proceeds will help Didi speed up mass production of driverless vehicles and invest in technologies like artificial intelligence chips, people said.
Plans for the latest fundraising could still change as considerations are at an early stage, according to the people. A representative for Didi declined to comment.
Beijing-based Didi is stepping up efforts to grow its presence in strategically important sectors like autonomous driving as it prepares to go public in what could be one of the largest tech IPOs globally this year. The firm has accelerated its pace to debut as a public company as early as next quarter and is targeting a valuation above the $62 billion it secured during its latest funding round, Bloomberg News has reported.
The startup -- the largest investment in SoftBank Group Corp.’s portfolio -- moved up its IPO plans from a previous target of late 2021, following a recovery from pandemic-induced disruptions. Daily rides and revenue at its core ride-sharing business have jumped to record levels, people with knowledge of the matter said. The company told Bloomberg News it doesn’t have a “definite” IPO plan or timeline.
Its self-driving effort, which completed a $300 million round of funding last month, lies at the heart of the Chinese tech giant’s ambitions beyond ride-sharing. The company began testing autonomous vehicles in 2016 before hiving off the business into a separate company in 2019, with a goal of operating more than 1 million self-driving taxis by 2030.
Meanwhile, Didi Freight, another spinoff that offers on-demand logistics services, is mulling seeking fresh funds just weeks after raising $1.5 billion at a post-money valuation of $3 billion, the people said. Investors including Temasek Holdings Pte and Jack Ma’s Yunfeng Capital participated in the last round in February.
The unit competes with Tencent Holdings Ltd.-backed Full Truck Alliance in using technology to streamline shipping services, as the Chinese economic recovery and a post-Covid e-commerce boom strain domestic logistics networks.
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