Uber has confirmed a $1.2 billion USD funding boost from previous backer Chinese search engine giant Baidu. It comes as Didi Kuaidi, their primary competitor in the market, is reportedly about to close a round of around $3 billion from its own investors.
It’s now become an all out war for market share as investors show they are not afraid to subsidize services in order to take a bigger piece of the Chinese ride-share pie.
Uber CEO Travis Kalanick told Chinese tech media site Sina.com that the financing round is still not finished, and that finding a suitable partner in the Chinese market was more important than the funding itself.
Bloomberg reportedon the same day that Didi Kuaidi’s latest injection from had increased the company’s valuation to $16.5 billion. While the full number of investors have not been disclosed, current investors in this round include SoftBank, China Investment Corporation, Alibaba Group, Tencent and Ping An Insurance.
Didi Kuaidi’s $3 billion investment surprised onlookers, surpassing the expected values. The company had revealed in July that they were planning $2 billion in funding, with President Jean Liu saying at the time that the company would only look to raise an extra “few hundred million dollars”.
Recent figures show Uber’s valuation is potentially $8 billion as of the latest round, though that amount could fluctuate depending on who the San Francisco-based company chooses to round out its series.
Uber has made agressive moves to localise in 2015 with their ‘Uber China’ arm, hoping to make it their biggest market globally. Earlier this year Kalanick said the company would be investing $1 billion in the Chinese market before the end of the year, and the company has been on the hunt for funding since, though given their large cash reserves it’s likely the $1 billion is not being sourced fom new investment. CEO Travis Kalanick is in Beijing this week to speak at the Baidu annual corporate conference.
The new funding injection has only upped the stakes for the two highly-valued startups, who are vying to establish market share in China. Didi Kuaidi now reportedly has a 95% share of the ride-hailing market, though it’s important to note that they operate in the taxi-hailing vertical, unlike Uber. When comparing Uber’s numbers with Didi Kuaidi’s non-taxi services the share is much more even.