Racing to Stay Ahead of Uber

A year ago, China’s market for taxi-hailing apps was split almost evenly between one service called Didi and another called Kuaidi. Investors began pouring in money and choosing sides: In December, Didi raised $700 million from Chinese e-commerce company Tencent and Russian private equity fund DST; a month later, Kuaidi announced $600 million in funding from Alibaba, Japanese telecom SoftBank, and other investors. Then, in February, the two merged.

The combined company, Didi Kuaidi, accounts for 99 percent of the country’s online taxi business and 78 percent of its private car business—a total of 8 million rides a day, according to researcher Analysys International. In July the company raised an additional $2 billion from investors including Alibaba, Tencent, and Temasek Holdings, the investment arm of the Singaporean government, and boosted its value to $15 billion. This latest funding round has one clear purpose: keeping Uber in Didi’s rearview mirror.