BIDU Baidu Inc

By Rick Carew, Douglas MacMillan and Juro Osawa 

China's top life insurer is making a big investment in the country's $25 billion homegrown competitor to Uber Technologies Inc., despite already investing in Uber's China operation, according to people familiar with the situation.

China Life Insurance Co. is plowing more than $500 million into Didi Chuxing Technology Co., after Apple Inc. made a $1 billion investment in the firm, China's biggest ride-sharing company, according to one of the people.

Didi has been raising money from investors for a monster financing round that would top $3.5 billion, including the China Life and Apple money, and would value the company at more than $25 billion.

As the two biggest ride-hailing companies scour the globe for capital, a few of the same investors are putting money into both companies.

China Life, which is a state-owned insurer, previously has invested in UberChina, the independent entity set up by San Francisco-based Uber last year.

China-based investment firm Hillhouse Capital Group was an early investor in Didi but also led a convertible bond deal to invest in Uber's global operations. Similarly, Tiger Global Management LLC has backed Didi in China and cut a deal in December for an investment in Uber's global operations.

Competing startups dislike overlapping shareholder bases because they often share confidential strategy and financial results with investors. It is unclear what arrangements Didi and Uber have made for those investors.

The battle for global investment allies has only intensified in recent months. Uber raised $3.5 billion from the investment arm of Saudi Arabia earlier this month as part of a $5 billion financing round, the largest to date raised by a private, venture-backed company.

Two of Didi's largest existing investors, online shopping company Alibaba Group Holding Ltd. and social network company Tencent Holdings Ltd., are boosting their investment in this latest round, the people said.

Didi's $25 billion-plus valuation is more than three times as large as that of UberChina, which has been valued at over $8 billion by investors. But Didi is still dwarfed by San Francisco-based Uber, which recently was valued at nearly $68 billion.

While Uber continues its global expansion, Didi has forged alliances with other ride-sharing companies around the world that compete against Uber. Didi has, for example, invested in U.S. ride-hailing firm Lyft Inc. and Singapore-based GrabTaxi Holdings Pte.

China is a crucial market for Uber, as it pours billions of dollars into expanding there. It has also run into the greatest competition in that country from Didi, which was formed last year by the merger of two rival Chinese taxi-hailing apps. Today, Didi not only has a larger share of China's private car-sharing market than Uber, but also dominates the taxi-hailing segment. The two companies disagreed on their market-share figures.

Liu Zhen, senior vice president of strategy at Uber's Chinese unit, said earlier this month that part of Uber's new funds raised from Saudi Arabia's investment arm will flow into its China operations.

Meanwhile, Uber and Didi both have strategic investors in China that can help broaden their reach.

Internet company Baidu Inc., for example, is an investor in UberChina, which lets hundreds of millions of users of Baidu's popular mobile-map app to hail an Uber ride. Didi, on the other hand, has been working closely with Tencent, operator of the popular WeChat messaging application whose 762 million monthly active users are predominantly in China. WeChat comes with a ride-hailing button that directs its users to Didi's services.

Write to Rick Carew at rick.carew@wsj.com, Douglas MacMillan at douglas.macmillan@wsj.com and Juro Osawa at juro.osawa@wsj.com

(END) Dow Jones Newswires

June 12, 2016 18:49 ET (22:49 GMT)

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