Briefing: Didi seeks funding for loss-making autonomous driving unit

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Didi Chuxing in Talks With SoftBank to Raise Money for Autonomous Driving Unit – The Information

What happened: Didi is reportedly in talks with key shareholder Softbank along with other potential investors to secure financing for its loss-making autonomous driving unit. Discussions are still underway and may not result in a deal, The Information cited anonymous sources as saying. Didi is yet to comment on the matter. Chinese media reports that the mobility giant’s valuation has halved to between $30 billion and $40 billion in the private equity market since hitting a high of $80 billion late last year.

Why it’s important: Self-driving technology firms have focused in raising money from potential investors and forming alliances to stay afloat. Uber completed a $1 billion funding round in April for its self-driving unit from Softbank’s Vision Fund, Toyota, and Japanese auto parts supplier Denso. The company has spent $1.1 billion, or around 30% of its overall R&D budget on the unit, according to its IPO filing. This also followed an earlier partnership between Alphabet’s self-driving unit Waymo, along with Nissan and Renault to bring driverless cars to Japan and France. Ford and Volkswagen also inked an alliance to share driverless fleet costs. A number of global automakers, including Ford, Audi, and Volvo have scaled back ambitious driverless vehicle deployment plans due to the technical limits.