The taxi wars are hotting up.
A day after reports of Uber raising a further $2bn (£1.4bn) to add to its already rather large cash pile, its rival in China has announced another $7bn in new funding that puts it squarely on the tail of the US startup when it comes to being the most well-funded private startup in the world.
Didi has raised $7.3bn in total from several top names, including a previously disclosed $1bn from tech titan Apple and $600m from China Life. Other investors including Alibaba's Ant Financial have ploughed $4.5bn in equity into Didi, along with existing investors such as Tencent and SoftBank.
The rest of the cash is a syndicated loan from existing investors, while $300m of China Life's investment was in the form of long term debt investment.
"In just four years, Didi has created a firm lead in China’s mobile transportation sector. With our advantages in technology, platform synergies and talented team, Didi is prepared to continue this momentum of growth," said founder Cheng Wei.
It takes Didi's total funding to $10.5bn and that cash will be spent on upgrading its technology and rider and driver experience, big data research and exploring new business opportunities, the company said.
The additional investment takes Didi's valuation to $28bn, helping it leapfrog Airbnb to become the third most highly valued private tech firm in the world.
Total equity funding
Uber boss Travis Kalanick has admitted that the firm is "sustainably" losing $1bn a year in China but believes it is worth it to win a market with more than 1bn people. It plans to operate in 100 cities in the country by the end of the year.
Didi, formerly known as Didi Kualdi, operates in 400 Chinese cities and boasts 14m registered drivers in the country, claiming a 99 per cent market share. More than 1bn rides were taken using Didi last year.
The growing war chests and ever-hotter battle for customers could spark a merger, however, as investors indicated cash might be better spent on growing their business than fighting each other.
Speaking to the Wall Street Journal, one investor said they could not continue to fight beyond a combined a investment of $30bn. Right now, it stands at around the $20bn mark.
“The first Gulf War cost about $60bn,” GSR Ventures's Allen Zhu told the Journal.