Tech

SoftBank leads $500 million investment in Chinese ride-hailing firm Didi's self-driving car unit

Key Points
  • Didi said it will use the funding to "accelerate" the launch of driverless vehicle services in China and abroad.
  • The firm plans to launch a "robo-taxi" service in Shanghai where users can hail self-driving cars through its app.
  • SoftBank led the round through Vision Fund 2, of which the Japanese telecom giant is currently the only backer.
Chinese ride-hailing company Didi Chuxing shows off its autonomous vehicle fleet during the World Artificial Intelligence Conference in Shanghai, China in August 2019.
Didi

Chinese ride-sharing giant Didi Chuxing raised more than $500 million in funding for its autonomous driving division, in a round that was led by SoftBank's Vision Fund 2.

The company announced Friday that its self-driving car business would use the mammoth investment to continue funding research and development and "accelerate" the launch of driverless vehicle services in China and abroad.

Didi plans to roll out a so-called "robo-taxi" service in Shanghai soon. Once the product is live, the idea is that users will be able to hail self-driving cars through the firm's app. Tiger Qie, Didi's vice president and chief technology officer of its ride-sharing unit, told CNBC back in November that the aim was to launch the new service "very soon."

It's noteworthy that the fresh capital comes from SoftBank's second Vision Fund. The Japanese telecom giant is the only investor to have actually committed money to the fund, and there are fears that Vision Fund 2 could be in jeopardy due to the poor performance of its initial $100 billion investment vehicle.

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Mubadala, Abu Dhabi's sovereign wealth fund, was a backer of the Vision Fund but is now said to be in two minds over whether to commit to the second one. A source told CNBC last week that Mubadala is "super spooked" by the performance of SoftBank's initial tech fund.

Didi President Jean Liu told CNBC at the start of the month that the company's core ride-hailing business was still profitable despite concerns over the impact of the coronavirus pandemic. She added that the business has seen a pick-up in activity after the outbreak had died down in China.

Didi's ambition is to launch fleets of driverless cars in a number of locations in China. The company gave a nod to Beijing's ambition to build a "comprehensive digital infrastructure network" based on high-tech innovations like 5G mobile internet, artificial intelligence and the internet of things.

"Didi also plans to further deepen cooperation with global upstream and downstream auto industry partners towards mass production of autonomous driving vehicles, with the aim of advancing the transformation of the global automotive and transportation industries," the company said in a statement Friday.

The firm added that it currently has licenses to test self-driving cars on the roads in Beijing, Shanghai and Suzhou in China, as well as California in the U.S.