Uber’s aspiration to cut itself a bigger share of the Chinese ride-hailing market seems to be slipping away from its reach with its Chinese arch rival, Didi Kuaidi, planning to raise another $1 billion for further expansion.
The investment round, which would value the company at $20 billion, is one among the many the two companies have added to their war chests to fuel growth through discounted pricing and lucrative referral and joining bonuses for drivers, The Wall Street Journal reported.
The company’s $1 billion investment round comes just days after Uber CEO Travis Kalanick announced that Uber China, which is valued at more than $8 billion, was losing $1 billion every year in the Chinese market. The losses come on the heels of several investment rounds for Uber China to fuel its marketing and growth efforts in the country.
Last year, Tencent-backed Didi Kuaidi raised another $3 billion, which valued the company at $16 billion and helped it maintain its edge over Uber.
While a billion dollar annual loss and the increasing valuation of its rival must not paint a bright picture for Uber, the company believes that Didi Kuaidi’s efforts to pump more money into its business will eventually prove futile.
“Look, we’re in China, where we have a fierce competitor, who is raising billions of dollars but is unprofitable in every city that they exist in,” Kalanick said, hinting at rival Didi Kuaidi. “The question for us is: Do we want to exist in China or not, and can we contain the irrational long enough to get to the point where the world does get rational?”
Advertisement: Scroll to Continue
