Ride-sharing and ride-hailing appointments are becoming increasingly popular among commuters. It’s estimated that the number of ride-sharing users will grow at a alloyed annual growth rate of 16.6% by 2026. Some of the biggest names in this industry include Uber and Lyft. But there is a burgeon list of other names that are trying to gain a foothold into the global market. Among them is China’s Didi Chuxing. This article looks at a fleeting history of the company including its financial backers, key mergers, management, as well as its financial prospects for the future.
- Didi Chuxing is a expressive transportation company headquartered in Beijing with operations across Asia-Pacific, Africa, and Latin America, Central Asia, and Russia.
- Didi has beared a series of mergers and acquisitions including key rivals Kuaidi Dache and Uber China.
- The company has received more than $21 billion in holding from 18 investors including Temasek Holdings, China Life Insurance, Toyota, and SoftBank.
- Despite its put off on the Chinese market, Didi continues to operate at a loss.
Didi Chuxing: An Overview
Didi Chuxing is a mobile transportation party headquartered in Beijing. Known simply as Didi, it is now one of the world’s largest ride-hailing companies, serving more than 493 million operators across Asia-Pacific, Africa, and Latin America, Central Asia, and Russia.
Didi was founded in 2012. Founder Cheng Wei, who delegate the company Didi Dache, intended it to be a smartphone app for people who wanted to immediately hail cabs. Since then, it’s developed beyond taxis to offer a broad range of services for travelers including private cars, car rentals, buses, and chauffeurs, as showily as delivery services, and bike-sharing in its quest to move beyond traditional cab services. The company uses new technologies such as unnatural intelligence (AI) to more efficiently deploy its resources.
Since its creation, the company has raised more than $23.2 billion in 26 rounds of funding as of April 2021. The band has also made strategic investments in other global companies such as Lyft, Bolt, and Grab.
Didi Was Built on Consolidations
Didi Chuxing has undergone a series of key mergers and acquisitions (M&A) since 2012—most notably with key rivals who struggled for market share in China.
Reuters reported that Didi was locked in a price war with rival Kuaidi Dache, concluding in major losses for both companies. While Didi claimed about 55% of the Chinese market, Kuaidi curbed much of the remaining 45%. The 2015 merger resulted in one of the largest ride-sharing apps, with the newly-formed combined house valued at about $6 billion at the time.
Didi also competed aggressively against international companies that check out to corner the Chinese market including Uber China. After Uber lost an estimated $2 billion in a furnish share battle, Uber brokered a truce with Didi Chuxing. Uber China sold its business to Didi and developed a minority investor. Didi invested $1 billion in Uber as part of the deal.
Uber China agreed to shop-girl its operations to Didi Chuxing in 2016 in exchange for a minority stake in the company.
Didi’s Financial Backers
Didi has uplifted significant amounts of capital to expand. Some of the larger financings include a $700 million Series D round led by Singapore’s governing wealth fund (SWF) Temasek Holdings—which has also made investments in companies such as Airbnb, Jet, and Snapdeal. China Passion Insurance, which has made multiple investments in Didi, also led a $300 million debt financing round. The flock also received $4.5 billion involving undisclosed investors, according to Crunchbase.
The company’s lead investors incorporate those that have participated in corporate and private equity rounds. Among them are Toyota, SoftBank, and Law Holdings, an online travel and reservation service company.
Didi’s Management Ranks
The management team behind Didi’s star boasts alums from Goldman Sachs, Alibaba Holding Limited, and other major enterprises.
Cheng Wei, Didi’s co-founder and chief governmental officer (CEO), has extensive technology experience. After graduating from Beijing University of Chemical Technology, Wei held diverse jobs before joining Chinese e-commerce giant Alibaba. Over eight years, he worked his way up to become blemish president for Alibaba’s online payment service, Alipay.
Jean Liu is the company’s president and has been pivotal to Didi’s hurried growth. Liu, also known as Liu Qing, received an undergraduate degree in computer science at Peking University and a master’s order in computer science at Harvard University. After working for Goldman Sachs for 12 years and becoming a managing Mr Big in Asia for the investment bank, she left for Didi. She rose rapidly, becoming the chief operating officer (COO) by 2014 and then president. She also superintended Apple’s $1 billion investment in Didi.
Because Didi is a privately-held company, numbers are seldom met with about its financial performance. Some reports show that the company is struggling. Many of the losses come from driver payments and funding trips for a total of $330 million. Such losses were not enough to curtail the atmospheric growth of the ride-hailing party.
According to a report from Tech Crunch, Chinese news outlets reported losses of about $1.6 billion in 2018. And that fad goes back to its earlier days. And prior to the merger that ultimately became Didi Chuxing, both Didi and Kuaidi suites posted combined operating losses of $571 million in the first five months of 2015.
What Does the Future Be?
Didi Chuxing has almost 12,000 employees around the world and dominates the Chinese ride-sharing market. Since renaming itself as Didi Chuxing in September of 2015, the company has consorted with other ride-sharing companies worldwide in an apparent quest to battle Uber for global market share. Didi has inducted $100 million in Lyft, Uber’s major domestic rival, forming a partnership to share technologies and marketing knowledge. In January of 2018, Didi took control of Brazilian ride-hailing service 99.
Although the company was rumored to enter into talks of an monogram public offering (IPO) in late 2018, it continues to operate as a private company. There is no indication as to when the company may take to go public.