Didi Chuxing in talks with SoftBank to raise capital for self-driving cars unit

The logo of Chinese ride-hailing firm Didi Chuxing is seen at their new drivers center in Toluca, Mexico, April 23, 2018. REUTERS/Carlos Jasso

Didi Chuxing, China’s largest ride-hailing platform, is in talks with SoftBank and other investors to raise capital for its self-driving cars business. This was first reported by The Information.

SoftBank, Didi’s largest shareholder, has previously expressed interest in self-driving cars. Earlier this year, SoftBank, Toyota and Denso, a Japanese auto parts maker collectively paid $1 billion for a 14 per cent stake in Uber’s autonomous vehicle development arm. SoftBank also owns a stake in General Motors’ Cruise, which develops robo-taxis for San Francisco.

The Didi-SoftBank talks indicate a rising trend of ride-hailing companies and automakers bringing in external investors to raise capital for their autonomous driving divisions. The report added that doing so is a more cost-effective way of bankrolling these projects, which tend to be capital and time intensive.

If successful, these driverless vehicle divisions may then be spun off as a separate unit to provide financial returns to its investors.

Didi meanwhile continues to suffer widening losses on its balance sheet. The company is burning vast amounts of cash – up to $1.5 billion last year – as it faces stiff local competition, regulatory hurdles and a public backlash involving the deaths of two passengers in its cars last year.

Partnering with strategic players like SoftBank could relieve Didi of the R&D cost that will come with autonomous driving – technology that has yet to gain wide traction in terms of execution. Didi currently has an R&D centre called Didi Labs, based in California’s Mountain View and Los Angeles, where it has been testing its autonomous car. According to Chinese corporate filings, Didi also formed an autonomous driving subsidiary in China earlier this year.

Last year, Didi signed an alliance with 31 other automotive companies including Renault-Nissan-Mitsubishi to collaborate on areas such as fleet management, car manufacturing and autonomous driving. It also set up a joint venture with Volkswagen and China’s BAIC to develop “next-generation connected-car systems” and technologies related to ride-hailing services.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.