After raising funds from a number of Chinese businesses, UberChina’s valuation has reached $7 billion.
Uber said on Monday that it has received fresh funds that have benefited its growing China division with $7bn, as it brought in local collaborators for aiding its war against a local Chinese competitor.
The global cab company, which is fighting a ferocious battle with a Chinese startup ‘Didi Kuaidi Joint Co. for capturing a market share, told it now counts Chinese car manufacturer ‘Guangzhou Automobile Company Group’, China’s largest life insurance company ‘China Life Insurance’, and airline operator ‘HNA Group’, as investors in its China division, UberChina.
China is a rare overseas market where the American company has lagged behind a local competitor. CEO Travis Kalanick has made China a focal point for the rapid global growth of the company, earmarking $1bn in 2015 for that state alone and establishing an independent Chinese organization, UberChina, with the help of the local mapping and search engine company ‘Baidu’.
Uber told that the $7bn valuation for its division in China was before its success in raising extra funds from the second round of UberChina, which follows a first fundraising round in 2015 that raised $1.2bn to finance its growth plans.
Mr. Travis revealed the Chinese investors in his speech in Beijing. Didi Kuaidi, which was established by merging two competing cab apps, early in 2015, has formidably challenged the transporter in receiving funds and operations.
Didi Kuaidi succeeded in closing a $3bn funding round in 2015 at a valuation of $16bn in the largest single placement raised by a venture capital-backed business. It has counted Alibaba and Tencent as its major shareholders. Both parties in China’s ride-sharing battle sought support of big homegrown partners to push them up in financing and growing operations.
Uber technologies has sought help from two Chinese insurance companies, China Taiping Insurance and China Life, while the Beijing-based company received support from Ping0020An Insurance Group and $740bn sovereign-wealth fund China Investment Corporation.
Both organizations have disbursed most of the funds received on subsidies to lure Chinese riders and motorists to their services. Uber succeeded with its private car offerings and Didi leads the homegrown cab-hailing business.
Didi is also challenging Uber on its local turf by making an investment of $100m into a primary Uber rival, Lyft. Didi along with some other Asian taxi companies, have established a coalition, called in technology circles as the “anti-Uber alliance,” to let every app user hire cabs from using the app of their home country while travelling overseas.