U.S.-based car-hailing service provider Uber is seeking to raise $1 billion for its China business, and search giant Baidu Inc will participate in the financing, news portal qq.com reported Tuesday, citing sources close to the matter.
Uber values itself at $5 billion to $7 billion and Baidu's investment may top $100 million, said the report, which cited sources who had access to documents Uber gave to potential Chinese investors. The fundraising effort began on June 22, the report said.
Uber announced in June that it would set up an independent management system and separate office for its operations in the Chinese mainland. It also plans to list its China business either in the mainland or in Hong Kong no earlier than 2016, probably before its global IPO.
On December 17, Baidu agreed to make a strategic investment in Uber. The value of the deal was not disclosed, but some media reports put the figure at about $600 million.
QQ.com reported that the Baidu investment in Uber will be made in two parts, involving one stake of about 1.5 percent in Uber's global company and another stake of no less than 10 percent in Uber's China business.
Baidu Vice President Liu Jun, who leads the company's mapping business and location-based services, has joined Uber's board, qq.com reported in May.
Huang Xue, a public relations employee in the Uber office in China, told the Global Times on Tuesday that the company does not comment on market rumors.
Chinese car-hailing firm Didi Kuaidi, seen as a rival to Uber, has raised $2 billion. It is also inviting new investors including Capital International Private Equity Fund and Chinese insurer Ping An Insurance (Group) Co, it said on July 8.
Didi Dache and Kuaidi Dache, backed by Chinese Internet giants Tencent Holdings and e-commerce giant Alibaba Group Holding respectively, merged in a $6 billion deal in February. The new company claims to be logging 3 million daily rides.
Including proceeds from the latest fundraising, Didi Kuaidi is forecast to have more than $3.5 billion in cash reserves, and it plans to expand into financing, insurance and overseas markets.
To get more capital to expand its China business, Uber has been seeking Chinese investors. But qq.com's source said that Uber previously did not provide detailed business performance information to potential investors, only claiming that it was logging 1 million daily rides in China.
The qq.com report said Uber expects its transactions in the mainland market will account for about one-third of the global total, but it also forecasts huge losses.
QQ.com's source said that investors are concerned about fake orders, and some fear that the company may not be eligible for a listing on the Chinese stock markets.
