Chinese ride-hailing firm Didi Chuxing is reportedly raising up to $2 billion from investors while bike-rental company Hellobike is seeking a $400 million cash infusion, the latest in a series of moves which signal that the two mobility firms are preparing for escalating competition.
Why it matters: Didi and Hellobike are now the biggest players in China’s ride-hailing and bike-rental markets, respectively, and they are increasingly moving onto each other’s turf.
- One of the world’s biggest startups, Didi formed a new business group including bike-sharing and motor scooter rentals in June in an aim to expand into the two-wheeler market.
- Hellobike launched a ride-hailing service on its app at the beginning of this year, and on May 21 said it had upwards of 2 million registered drivers across 300 Chinese cities in trial operations.
Both Didi and Hellobike declined to comment on funding matters when contacted by TechNode on Thursday.
Details: Didi intends to sell additional shares at the same price as when it raised $500 million from US travel firm Booking Holdings in July 2018, the Wall Street Journal reported citing a person familiar with the matter. Hellobike’s new round of funding totaling $400 million is led by Ant Financial, Chinese media said Wednesday.
- Didi will be valued around $62 billion after the deal, up from $51.6 billion as of December, according to securities filings from Uber earlier this year, making it the third-largest privately owned tech company worldwide after Ant Financial and Bytedance.
- Hellobike will have a paper valuation of $5 billion after the funding round. The company secured five rounds of investment totaling RMB 20 billion in 2018, and is backed by Ant Financial and investment firms Primavera Capital Group and GGV Capital.
Context: Chinese ride-hailing and shared-bike markets are reshuffling as investment capital and regulations tighten. Big industry players are seeking new growth opportunities to increase their presence.
- The next stage of growth for ride-hailing apps may quickly evolve into a battle for traffic. Didi this week launched an open platform allowing users to book rides from rival companies amid driver shortages and increasing costs, following life services super-app Meituan in April and three state-backed automakers.
- Alibaba-backed Amap has offered similar services with an aggregation model since July 2017. It reportedly has 700,000 ride orders a day, around 3% of the number of trips on Didi’s platform every day.
- Hellobike continues to push its shared electric scooter business forward, working with Ant Financial and Chinese battery maker CATL to build battery swapping infrastructure nationwide. It so far already provides battery charging services to 2 million e-bikes.