UberChina to get $1bn finance to compete with Didi Kuaidi

Ride-hailing service Uber's Chinese affiliate is close to securing about $1bn (£647m, €885m) new funding from investors. The finance is expected to help the firm expand its operations and compete with market leader Didi Kuaidi.

The Wall Street Journal, citing a person familiar with the matter, reported that investors have agreed to the funding that would value UberChina at about $7.5bn. The source added that it could take several weeks for the funding round to close officially, despite the completion of final paperwork.

Uber is looking to bolster its services in India and China, the first and second most populous nations in the world. In June, the company announced a $1bn investment in China to compete with market leader Didi Kuaidi, which is backed by internet giants Alibaba and Tencent.

Meanwhile, Didi Kuaidi is deep-pocketed with the support of Alibaba and Tencent, and it could counter Uber's move. Ride-sharing apps normally add drivers and customers to its network through cash incentives to drivers and subsidised cost to travellers.

In July, Didi Kuaidi raised $2bn from investors in a funding round that valued it at roughly $15bn, the WSJ reported, citing people familiar with the matter. It is currently working on securing additional capital in a "second closing" of the round, expected to be completed in the next few weeks.

In China, Uber employs a different strategy, setting up a locally funded affiliate in order to avoid the country's general dislike for US technology companies. Uber's Chinese investors include Hillhouse Capital Group, one of the biggest fund managers in Asia.

In addition, it made a strategic tie-up with Baidu, the Chinese internet major rivalling both Tencent and Alibaba. Uber is using the search provider's mapping and payment service in the country.