Didi’s Logistics Arm Seeks $400 Million in Debut Funding

(Bloomberg) -- Didi Chuxing Inc.’s foray into China’s on-demand trucking services market is seeking a debut funding round, people with knowledge of the matter said.

The logistics unit, known as Didi Freight, is looking to raise $300 million to $400 million, said the people, who asked not to be identified discussing a private matter. The company has reached out to potential investors for the fundraising, which could value the business at as much as $2 billion, the people said.

Didi, the ride-hailing giant backed by SoftBank Group Corp., first launched the on-demand logistics service in Chengdu and Hangzhou in June, according to its press release. It has since expanded to eight cities, serving more than 100,000 orders each day on average.

The move comes as Didi embarks on initiatives to capture growing demand for logistics services in China due to the coronavirus pandemic. It is taking on larger rivals including Full Trunk Alliance, known also by its Chinese name Manbang, as well as Huolala, in an already crowded market. The ride-hailing giant is also ramping up its autonomous driving unit as well as robo-taxi service.

Read more: SoftBank-Backed Didi Ramping Up Driverless Unit Hiring in 2020

Huolala, also known as Lalamove, is seeking to raise at least $500 million in a new funding round that could give the Hong Kong-based company a valuation of about $8 billion, Bloomberg News reported this week. Huolala operates in more than 350 cities across China, according to its website.

Deliberations for Didi Freight’s fundraising are at an early stage and details such as the funding size may change, the people said. A representative for Didi declined to comment.

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With assistance from Bloomberg