Didi Chuxing is called the 'Uber of China,' but it dwarfs the US company

A taxi driver uses the Didi Chuxing app while driving along a street in Guilin, China.
Greg Baker | AFP | Getty Images

It's often referred to as the "Uber of China," but Didi Chuxing in fact crushes Uber and other competitors in the Chinese market.

Didi virtually owns China's taxi-hailing market with a 99 percent market share, according to its own numbers, and an 87 percent market share when it comes to hailing private cars. It operates in over 400 cities across the country versus UberChina's 45 cities.

The company isn't just cars and taxis. Didi also offers services with buses and even has an option to book chauffeurs — which can be useful if one has had too much to drink and needs a designated driver to take both the car and car owner home.

So where did Didi Chuxing come from?

Didi Chuxing in Chinese literally translates to "honk honk, commute." Before changing its name last fall, Didi Chuxing was known as Didi Kuaidi — created by the merger in early 2015 of China's two largest car-hailing apps at the time, Didi Dache and Kuaidi Dache.

Apple invests $1B in Didi Chuxing
Apple invests $1B in Didi Chuxing

Many believe the motivation behind the merger was to fend off the competition posed by Uber in the Chinese market, and to scale up by combining.

When it comes to backers, even before Apple came along with a $1 billion investment, Didi already had secured funding from two of the largest and influential internet giants in China — Alibaba and Tencent. In fact, the CEO and co-founder of Didi Chuxing, Cheng Wei, is an Alibaba alumnus, while its president, Jean Liu, is a former Goldman Sachs banker whose father is Lenovo founder Liu Chuanzhi.

Fundraising has not been a problem for Didi, unlike other start-ups in a slowing global economy. Didi has powered ahead, growing to a valuation upwards of $20 billion, according to those with knowledge of the fundraising. That's up from a mere $6 billion in February 2015.

Jean Liu said in a conference call this week that Didi's fundraising is "oversubscribed with much more demand than we initially planned for."

So what does Didi Chuxing do with the money they have raised?

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Applicants stand inside an Uber Technologies Inc. office during a driver recruitment event in Hong Kong, China, on Tuesday, Dec. 29, 2015.
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Didi told Bloomberg in April it wants to invest in artificial intelligence to make the system smarter in matching cars with customers.

When it comes to international expansion, Didi has said it is still focusing on the Chinese market, but did join the global alliance with Lyft, Ola and Grab Taxi to rival Uber.

Didi has declined to share financials but it has said it is closer to profitability than ever and has $3 billion in cash on the balance sheet as of the end of last year.