Chinese ride-sharing app DidiKuaidi to raise 1.5 billion USD

Following Uber, who began to raise found for its Chinese business in June 22, Chinese local ride-sharing app DidiKuaidi launched another round of capital-raising of around $1.5 billion to promote the development of the company’s next stage, according to the Letter to Shareholders written by Cheng Wei, the chairman and CEO of DidiKuaidi.

The company had enough capital to maintain usual operation, however it has a great need to raise money when it launched a new carpooling service called “Didi Shun Feng Che”, to challenge People’s Uber service of its rival Uber. Besides, the ride-sharing app war is escalating in China, with almost all major ride-sharing apps using subsidies to attract passengers, which has put up costs.

As a result of receiving more than expected bids, the company is considering to expanding the scale of the investment. Previous funding put the company at a valuation of more than six billion U.S. dollars.

In Cheng’sLetter to Shareholders, Cheng also predicts that Didi-Kuaidi will have an annual revenue of some 12 billion U.S. dollars by the end of 2016. Not specifying Uber, Cheng said Didi-Kuaidi has helped drivers pick up more passengers and earn more, even with less subsidies than its competitors.