Uber China raises financing at US$7b valuation

[SAN FRANCISCO] Uber said its China division has raised financing that values that part of the ride-hailing company's operation at US$7 billion. Travis Kalanick, Uber's chief executive officer, discussed the new funds at a press conference in Beijing on Monday.

Backers of Uber China include HNA Group, operator of China's fourth-largest airline; China Taiping Insurance Holdings; Guangzhou Automobile Group; China Life Insurance, the nation's largest insurer; and Citic Securities, a Chinese investment bank. Uber has been looking for a person to run its Chinese operation for months but has yet to name someone. Liu Zhen, who reports to Kalanick, will continue to run the business in the meantime.

Uber is bumping up against local competitors around the world. Nowhere is the competition more fierce than in China, where Uber faces Didi Kuaidi. The company is backed by Alibaba and Tencent, the country's two most valuable technology companies. Uber and Didi Kuaidi are each spending aggressively to expand, partly by subsidising the costs of rides. In a letter to investors in 2015, Mr Kalanick committed to spending US$1 billion that year in China. It may have surpassed that figure.

Didi Kuaidi said on Monday that it completed 1.43 billion trips in 2015.

Uber said it increased its share of the private car market in China to 30 per cent or 35 per cent as of the end of 2015, from 1 per cent in January 2015. (The Information reported a similar figure earlier on Monday.)

Didi Kuaidi said it holds 87.2 per cent of China's private car-hailing market, attributing the figure to a Chinese research firm.

A recent round of financing gave Didi Kuaidi a valuation of US$16.5 billion, a person familiar with the matter said in September. Uber, which owns a controlling stake in Uber China, was last valued at US$62.5 billion, people familiar with the matter said in December. Uber China's US$7 billion valuation does not include the new cash.

An Uber spokeswoman declined to comment on how much was invested in that round, what portion of the investment had closed, and how much the US company had committed to invest in the Chinese offshoot.

BLOOMBERG