A smartphone shows apps for Kuaidi Dache and Didi Dache side by side, before the two merged in February 2015.
Photograph by AFP/Getty Images
By Daniel Roberts
July 8, 2015

The taxi wars are reaching a boil in China, and Uber’s biggest competitor on the ground just notched a big win.

In June, Fortune reported that Uber CEO Travis Kalanick had told shareholders he planned to invest $1.1 billion in China in 2015; the red-hot startup has major plans for expansion there, and this week Bloomberg reports that the company is seeking $1 billion in new funding, all for China operations.

But Didi Kuaidi got there first. The company has officially closed a round of $2 billion in new funding, it announced today. This round initially “kicked off” two weeks ago, Didi Kuaidi said in a statement sent to Fortune, and the investors include new, “globally renowned” groups like Capital International Private Equity Fund and Ping An Ventures, as well as existing shareholders Alibaba (BABA) and Tencent. (As Fortune has written, Uber’s strategy in China is much like Alibaba’s; but it is Didi Kuaidi that has Alibaba’s backing.)

Didi Kuaidi is the result of a February merger between Didi Dache and Kuaidi Dache, and comes in at no. 11 on Fortune‘s Unicorn List, with an $8.8 billion valuation. (Impressive, yes, but Uber’s valuation? $41 billion, and rumored to soon balloon to $50 billion when it closes its next round.)

In a June 26 investor letter leaked to Fortune, Didi Kuaidi told shareholders of its plan to raise $1.5 billion—a goal it exceeded. “Last week we set out to raise approximately USD $1.5 billion in additional capital from investors around the world to fund the next phase of our growth. In just five days, we were oversubscribed. We may plan to upsize given the oversubscription,” the letter said. “In the past three years, we have transformed from China’s leading taxi hailing service provider to become the largest transportation platform in the world.”

That letter contained some eye-opening numbers, not all of which had been previously reported: Didi Kuaidi’s requests for cars have gone from 1 million to 3 million per day rides since May—a weekly growth rate of more than 30 percent; the company claims it has 80% market share in the private car sector in China, which means it will be tough for Uber to scale quickly; it expects its annual gross merchandise volume to reach $12 billion by the end of 2015.

It’s all good news from Didi Kuaidi, but even the market leader acknowledges that competition is on the way, and that the industry is still in its early stages and open to many challengers. “The mobile transportation industry in China is still at its early stage, and there is significant room for growth,” the letter says.

Uber hopes so, too.

 

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