Less than a year after closing a mammoth $7.3 billion investment, Digi Chuxing Technology Co. is raising eyebrows in the venture capital world once again.
The Chinese ride-hailing giant today divulged that it has raised a stunning $5.5 billion as part of a new round that the usual anonymous sources claim values it at around $50 billion. The tipsters told several publications that the investment saw the participation of Japan’s SoftBank Group Corp, Silver Lake Kraftwerk and a few of the backers that contributed to its previous $7.3 billion raise. This is in line with the early reports about the raise that emerged last month.
Didi Chuxing has big plans for the capital. The company said in a statement that the new funds will go toward making “systemic breakthroughs in intelligent driving technologies and smart transportation architecture,” which can be interpreted to mean artificial intelligence.
As part of its efforts, Didi Chuxing opened opened a research center in Mountain View, California, earlier this year that focuses on developing autonomous navigation technology. Didi is one of several Chinese tech firms that have established AI labs in the Bay Area recently as part of an effort to gain an edge over Western rivals. In the case of Didi Chuxing, one of the main targets is likely Uber Technologies Inc.
Uber is pursuing its own self-driving car program that is making progress despite recent setbacks. Uber doesn’t compete with Didi Chuxing in its native China as a result of a deal they reached last year, but the companies are poised to clash on other fronts.
Besides stepping up engineering, Didi Chuxing stated that the new funding will also be used to “bring value to urban transportation markets around the world.” The company’s international efforts have so far focused mainly on partnering with Uber competitors, but that may change in the wake of today’s cash infusion. It certainly would have a lot to gain by tapping into the global ride-hailing market.
The only question, and it’s a big one, is whether Didi Chuxing can pull it off. If it starts expand beyond China in earnest, the company will face off not only against Uber but also numerous smaller players that all have a significant head start. With that said, $5.5 billion can go a long way toward evening the playing field.