Didi Chuxing raises US$500 million for self-driving unit in funding round led by SoftBank

The investment will bankroll further research and development, testing and collaboration on autonomous driving services in China and overseas
It marks the single largest investment in China’s autonomous driving sector

Didi Chuxing

Sarah Daiin Beijing

Published: 9:01pm, 29 May 2020

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Didi Chuxing has raised more than US$500 million for its autonomous driving subsidiary in a funding round led by SoftBank Group Corp’s Vision Fund 2, heating up the race in China to develop a driverless future.

The deal marks the first fundraising effort for the Didi unit, which became an independent business last year, as well as the single largest investment made in China’s autonomous driving sector, according to the Beijing-based ride-hailing giant in a statement on Friday. It did not provide a valuation for the subsidiary.

That transaction surpassed the US$462 million raised in February by Chinese start-up Pony.ai in a funding round led by Toyota Motor Co. It put the valuation of Pony.ai at just over US$3 billion.

Didi said the new investment will bankroll continued research and development, testing and industry cooperation to “accelerate the deployment of autonomous driving services in specific areas in China and abroad”.

With more resources directed to self-driving technology, so-called vehicle-to-everything systems and related artificial intelligence (AI) capabilities, Didi said it plans to launch autonomous fleet operations in select locations across China, the world’s biggest car market. In addition, the company aims to deepen ties with car industry partners to mass-produce autonomous vehicles.

Didi Chuxing plans to launch a pilot robotaxi service in Shanghai that will enable users to hail autonomous vehicles from the company’s app. Photo: Handout

The successful funding initiative by Didi marks another step forward in the global move towards autonomous vehicles, which are quickly becoming the world’s first major AI revolution. The sector has drawn billions of dollars of investment over the past few years, with the global autonomous vehicles market projected to be worth US$65.3 billion by 2027, according to a report from Market Research Future.

The Chinese government wants a broad domestic ecosystem around smart vehicles established by 2025, when highly automated cars would make up 15 per cent of total vehicle sales.

Didi, which is one of Japanese tech conglomerate SoftBank’s major portfolio companies, started its research, development and testing of autonomous vehicles in 2016.

The ride-hailing company currently has open-road testing licences in Beijing, Suzhou and Shanghai, where it was one of the first to obtain approval to operate a pilot robotaxi service. Overseas, it has an open-road testing licence in California.

Didi boss Jean Liu says core business profitable, as China’s ride-hailing market recovers from Covid-19

Didi’s autonomous driving business is now working with Xiaoju Automobile Solutions, a one-stop car services platform, and Didi Finance to explore next-generation integrated mobility operations, including smart charging networks, fleet maintenance service and insurance programmes for autonomous fleets.

Still, Didi is expected to face strong competition as autonomous driving initiatives around the world move forward. A pack of self-driving start-ups and programmes have flourished in China over the past few years, as Beijing moved to foster the country’s leadership in hi-tech fields such as AI, the industrial internet and 5G mobile services. Pony.ai, for example, has already launched robotaxi services in China and the US.

Some of the country’s biggest technology companies, including Baidu, Alibaba Group Holding and Tencent Holdings, are also investing in various autonomous driving programmes. Alibaba is the parent company of the South China Morning Post.

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