Chinese Ride-Hailing Giant Didi Chuxing’s Community Business Is Considering Raising $4 Billion To Boost Its Growth Amid Increasing Demand.
Chinese Ride-Hailing Giant Didi Chuxing’s Community Business Is Considering Raising $4 Billion To Boost Its Growth Amid Increasing Demand for group-buying delivery services, according to people familiar with the matter. Didi, backed by SoftBank Group Corp., is weighing chipping in about $3 billion to Chengxin Youxuan, the people said, asking not to be identified because the matter is private. It’s also working with advisers to raise about $1 billion from outside investors for the business, the people said.
Any fresh capital will help Didi to gear up against intensifying competition in China’s community business, which allows customers to order fresh groceries in groups and get them delivered to home or their neighborhood. The country’s tech giants Alibaba Group Holding Ltd., Meituan and Pinduoduo Inc. have all launched their group-buying platforms, which have become more popular during the Covid-19 pandemic.
Community group buying also attracted billions in startup investment. Xingsheng Youxuan, a grocery app backed by Kuaishou Technology, was valued at about $5 billion after additional investment from Tencent Holdings Ltd., Bloomberg News reported last month. Its rivals Beijing MissFresh Ecommerce Co. and Beijing DMall E-commerce Co. have also recently sought to raise fresh funds.
Didi, which defeated Uber Technologies Inc. in China, has in recent years diversified beyond its ride-hailing business, adding operations such as on-demand trucking, autonomous driving and cloud computing. The startup is close to finalizing a $1.5 billion funding round for Didi Freight, Bloomberg News reported last week.
Details of Chengxin Youxuan’s fundraising such as the size of the deal could still change as considerations are at early stage, the people said. A representative for Didi said the company does not comment on market speculation.
This news was originally published at Bloomberg.