KuaiDi Dache, China’s leading mobile app for on-demand taxis, announced yesterday that it has raised an additional $600 million–just days after Chinese officials signaled their intent to crack down on ride-hailing companies’ illegal use of private cars.
“We are looking forward to working together to further expand our services, and to continue to positively impact city transportations systems,” CEO Chuanwei Lu said in a carefully worded statement.
Since its 2012 founding, KuaiDi Dache has quickly grown to a fleet of 1 million cars in 300 Chinese cities thanks to nearly $1 billion in funding from Japanese telecommunications heavyweight SoftBank Corp., Alibaba, and Tiger Global Management LLC, all of which participated in this latest round.
Asian technology giants are pouring money into the taxi apps, which they perceive as a way to lay claim to China’s valuable mobile consumers. In December, rival Didi Dache raised $700 million from Chinese gaming and social network Tencent, and U.S.-based Uber brokered a $600 million deal with Chinese search company Baidu.
As of November, KuaiDi Dache controlled just over half of China’s ride-hailing market, with 54.4% of user accounts, according to Beijing-based research firm Analysys International. Didi Dache is close behind, with 44.9%.
Chinese authorities have welcomed the apps, but only if they use licensed cars and drivers. Uber, which has focused on private cars and drivers in the other markets where it operates, has run into trouble for flouting that requirement; last month police raided an Uber training session taking place in the southwestern city of Chongqing.