UberChina Closing In on $1 Billion in New Funding
August 27 2015 - 04:30PM
Dow Jones News
The Chinese affiliate of Uber Technologies Inc. is close to
securing about $1 billion in new funding from investors in the
region, part of the ride-hailing company's rivalry with
deep-pocketed Chinese rival Didi Kuaidi Joint Co.
Investors have agreed to funding that would value UberChina at
about $7.5 billion, according to a person familiar with the matter.
The final paperwork has been signed but it could take several weeks
for the round to officially close, the person said.
Reuters earlier reported the funding for UberChina, which is
majority owned by Uber but also has outside investors.
Winning the support of local investors may help Uber build
allies in China, its largest market outside the U.S. and the site
of its fiercest competitive battle. Didi Kuaidi, backed by China's
leading Internet companies Alibaba Group Holding Ltd. and Tencent
Holdings Ltd., has raced with Uber to add millions of drivers and
passengers by subsidizing the cost of trips and doling out cash
incentives to drivers.
Uber's chief executive earlier this year called China the
company's top global priority and said it plans to spend $1 billion
this year to expand in the country.
By setting up a separate, locally-funded operation, Uber aims to
win the support of the Chinese government, which has historically
created obstacles to expansion in the region for U.S. technology
companies.
Uber formed a strategic partnership with China's Baidu Inc. last
year that included an investment in Uber's China operations. Uber's
service in China uses Baidu's mapping and payments service.
A spokeswoman for Uber declined to comment on the funding.
Uber's Chinese investors include Hillhouse Capital Group, one of
the biggest fund managers in Asia, which in June led a round of
funding in Uber's global operation involving bonds that convert
into shares at a discount to the price in a potential Uber initial
public offering.
Hillhouse also invested in ride-sharing service Didi Dache ahead
of its $6 billion merger with rival Kuaidi Dache in February.
Didi Kuaidi, the merged homegrown rival in China, last month
raised $2 billion from investors in a round of funding valuing it
at roughly $15 billion, people familiar with the matter told The
Wall Street Journal. It is currently working on securing additional
capital in a "second closing" of the round expected to be completed
in the next few weeks, potentially bolstering the startup's war
chest by up to $1 billion from investors including sovereign-wealth
fund China Investment Corp., people familiar with the matter said.
Didi Kuaidi didn't immediately respond to a request for
comment.
In June, Hillhouse led a separate round of funding in Uber's
global operation involving bonds that convert into shares at a
discount to the price in a potential Uber initial public offering.
Uber hasn't publicly discussed any plans for an IPO and is looking
for a chief financial officer who would be a key player in the
deal.
Write to Douglas MacMillan at douglas.macmillan@wsj.com and Rick
Carew at rick.carew@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 27, 2015 16:15 ET (20:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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