China's Didi raises $500m for autonomous driving unit

This is the first outside funding for the business and Didi claims it represents the single largest investment in China's autonomous driving industry. The SoftBank-led round surpasses a $462 million investment in Pony.ai in February, of which $400 million came from Toyota Motor Corporation.

Didi first began to develop and test autonomous driving vehicles in 2016 and created a dedicated business unit last August. The new capital will support research and testing efforts. Didi has open-road testing licenses in Beijing, Shanghai and Suzhou in China, as well as in California. The company was among the first to win approval for manned autonomous mobility services in Shanghai. It wants Didi customers to be able to haul autonomous vehicles through a pilot robo-taxi service in the city.

The business is working with Didi's auto solutions and financial services platforms on next-generation integrated mobility solutions, including smart charging networks, fleet maintenance services, and insurance programs for autonomous fleets. It is also cooperating with upstream and downstream partners within the automotive industry to facilitate the mass production of autonomous driving vehicles.

In addition to running its own tests, Didi will leverage the transportation data from its ride-hailing platform to run simulation tests, according to a statement.

Didi describes itself as the world's leading mobile transportation platform, offering a full range of app-based transportation services for 550 million users across Asia, Latin America and Australia. These include taxi, carpool, limousine, bus, designated driver, bike-sharing, and food delivery services. The company also uses its technology platform to provide enterprise solutions. Didi facilitates more than 10 billion passenger trips a year.

Didi has received substantial private funding, most recently a $600 million commitment from Toyota last July. This came a few months after SoftBank invested $1.6 billion in the company. This was the Japanese firm's third investment in Didi: it previously put in $5 billion in 2017 and participated in a $7.3 billion deal in 2016.

SoftBank's first Vision Fund closed at $100 billion in 2018 and has failed to meet expectations. About JPY8.8 trillion ($81.7 billion) has been invested in over 88 companies, of which 47 were marked down as of March. The overall portfolio has lost JPY100 billion in value – putting the IRR at minus 1% - but LPs hold preferred equity with a 7% fixed distribution, so they receive money regardless.

Last year, SoftBank announced it had $108 billion in commitments for a successor vehicle. Speaking to analysts in May, Masayoshi Son, the firm's founder said that marketing for Fund II was on hold "because the performance [of] Vision Fund 1 is not that great." SoftBank is therefore using its own capital to make investments for Fund II.

Investors have poured millions of dollars into China-based autonomous driving start-ups in the last few years, including WeRide.ai, DeepRoute, Yihang.ai, and Roadstar.ai. The latter subsequently folded due to differences between the founders. Developers of sensors that enable autonomous navigation and control – such as Momenta, Hesai and RoboSense – have also received funding.

Pony.ai claims to be among the most advanced, having launched robotaxi services Guangzhou in December 2018 and in California last November. In 2018, it became the first start-up to secure an autonomous vehicle testing license in Beijing. The total mileage of the company's autonomous driving tests exceeds 1.5 million kilometers.

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• Topics
• Greater China
• Technology
• Expansion
• China
• Softbank
• Transportation
• automobiles
• Growth capital