Didi Chuxing, China’s ridesharing giant, is pondering a move to raise $4 billion to meet the surging demand for group-buying delivery services, Bloomberg reported on Friday (Feb. 5), citing sources.
SoftBank-backed Didi is considering earmarking $3 billion to assist its group-buying unit Chengxin Youxuan, according to the source, per Bloomberg. It’s also in talks with advisers to raise about $1 billion from other investors, the sources said.
As China’s community business gains increasing traction, new funding could help DiDi stay competitive. The community group-buying trend enables people to order groceries as separate groups for delivery.
Indian tech giants Alibaba, Meituan and Pinduoduo have already rolled out group-buying platforms that surged in use during COVID-19. Community group-buying also benefited from startup investment funds totaling billions.
Community group buying for groceries is the most recent eCommerce trend to hit China. The business model has disrupted traditional wholesalers and has gotten the attention of regulators.
Didi, founded in 2012 in Beijing by Bo Zhang and Wei Cheng, has taken its business beyond ride-hailing to include on-demand trucking, autonomous transportation and cloud computing. The mobile transportation startup is about ready to close a $1.5 billion funding round for Didi Freight, per Bloomberg.
The Chengxin Youxuan funding deal is at an early stage and subject to change, the sources said.
Chengxin Youxuan has already been integrated into the main app and has an estimated daily volume of 2.8 million, according to the South China Morning Post.
The project was initially launched as a standalone WeChat mini-program in June. Consumers can place orders online and then choose a pickup place or get it delivered.
Didi Chengxin raised $300 million last month to advance its autonomous driving unit, adding to the $500 million the company raised in May. The funding was led by investment firm IDG Capital, with participation from CPE, the Russia-China Investment Fund, Guotai Junan International and CCB International.
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