Uber Of China Raises Record $1.5 Billion To Dominate Chinese Taxi Hailing Market


Uber Of China Raises Record $1.5 Billion To Dominate Chinese Taxi Hailing Market

After a record-breaking funding campaign, hundreds of free rides are now being offered throughout Mainland China by Chinese taxi and car-hailing app Didi Kuaidi. The company has raised enough funds to offer these rides in hundreds of Chinese cities, putting pressure on American ride-sharing giant Uber, which sees China as perhaps its largest market.

Last week, Didi Kuaidi outdid social media giant Facebook when it broke the previous record of $1.5 billion in a single fundraising round. The car service, that combines previous competing apps, Didi Dache and Kuaidi Dache, raised over $2 billion during a single session. With these two companies now together since Februrary, Didi Kuaidi owns more than 90% of the taxi-hailing market in China.

The company joins a list of Chinese internet juggernauts, such as red-hot smartphone maker Xiaomi, ecommerce giant Alibaba and search engine Baidu, who are increasingly rivaling large American tech icons like Apple, Amazon and Google.

For downloading the new Didi Kuadi application, customers will have the opportunity to get a free ride of around 6 miles for about $2.50. This offer is available the 13th and 20th of July. This is being called the “Orange Monday” scheme and is being promoted by several prominent individuals. Some of these people include director Jia Zhangke, founder and chairman of Tencent, Pony Ma Huateng and angel investor Xu Xiapoing.

All of the success from the fundraising campaign leaves Didi Kuaidi with a lot of cash. The company plans to put some of that money towards promoting the “Orange Monday” concept. It is projected that this could cost the taxi-hailing app around $16.3 million, according to research firm Analysys, based on the fact Didi Kuaidi processes about $3 million daily from its rides on the app.

Before merging, both companies spent a total of $80.3 million on passenger and driver subsidies. This proves that the company is not afraid to spend money when it comes to sustaining their share of the market or when reaching for more, which is sure to not be appreciated by rival Uber, who also operates in the country.

After announcing an investment of $1 billion in the China portion of their company, Uber inadvertently placed a large target on their backs and it is thought that the latest promotion by Didi Kuaidi is in reaction to this move.

Uber did not comment on the promotions.

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