Didi, Hellobike refill war chest as competition in mobility sector heats up

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

Chinese ride-hailing giant Didi Chuxing is reportedly raising $2 billion from investors while bike-sharing firm Hellobike secured $400 million in an Ant Financial-led funding round as part of efforts to beef up their war chest as competition in the sector escalates.

According to a report by The Wall Street Journal, Beijing-based Didi plans to sell additional shares to raise $2 billion, which should raise the seven-year-old firm’s paper valuation to around $62 billion.

The latest fundraising move by Didi, the biggest players in China’s ride-hailing market, comes as the company 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.

Last July, Didi was in talks with SoftBank and other investors to raise capital for its self-driving cars business. SoftBank, Didi’s largest shareholder, has previously expressed interest in self-driving cars.

In a separate report, Chinese media QQ said bike-sharing firm Hellobike raised $400 million in a funding round led by Ant Financial, giving the company a paper valuation of $5 billion.

Hellobike tapped investors at least twice last year, completing a 4 billion yuan ($596 million) round as recently as December, according to Chinese news publication Jiemian. Co-founder Li Kaizhu said in a January interview that the company would seek a future initial public offering without specifying a time-frame.

Hellobike, China’s third-largest bike-sharing company, earlier partnered with Ant Financial and CATL to invest 1 billion yuan ($144.5 million) to establish an e-bike battery joint venture.

Hellobike was merged with Youon Bike in 2017 and funded by Alibaba Group. The company has managed to remain a standalone entity and now has 200 million registered users.