DUBLIN, April 7, 2016 /PRNewswire/ --
Chinese transportation network company Didi Kuaidi has raised the target of its latest funding round to over USD 1.5 billion, as it prepares for the inevitable showdown with Uber. China's biggest ride-hailing service is expected to be valued at more than USD 20 billion following this round, which will close soon and is oversubscribed by multiple times. Didi had sought to raise USD 1 billion, but chose to extend the round due to the tough competition it expects to face from Uber. The global IT spending market by cab aggregators is set to grow at a CAGR of 3.4% by 2019, according to a report available from Research and Markets, suggesting a ride-hailing market dominated by the bigger companies.
Didi will use its funding to recruit drivers and ensure fares are kept competitive, something it hopes will combat Uber's aggressive growth in China. Uber spent more than USD 1 billion in China last year and expects China to become its largest market. Didi operates in over 400 cities across China and will serve 30 million customers by the end of 2016. It expects to expand its active drivers from the 4 million it currently has to 10 million by the year's end.
Didi Kuaidi has a financial advantage over Uber in that it also offers vehicle rental services, which are popular in China. The China car rental industry will expand from 400,000 vehicles for lease in 2014 to 750,000 vehicles for lease in 2018, as forecast in an industry report.
The global taxi market is expected to grow from 4 million vehicles in 2014 to 5 million in 2020, as predicted in a market report. However, this forecast could be higher if network companies like Didi Kuaidi and Uber continue to aggressively expand their services in an attempt to beat competitors.
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SOURCE Research and Markets