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00:00:02
>> An eye-popping valuation for China's answer to Uber. Sources say ride hailing app Didi Chuxing is close to a deal that would value it at around $50 billion, making it the most valuable startup in China. The company is looking to tap investors for up to $6 billion in additional funding, but as Reuters Breakingviews Robyn Mak explains, it's unclear why they even need the cash.
00:00:24
>> Last June, they raised over $7 billion from Apple and other investors, and at that time, they already said that they had over $10 billion of funds to use. And surely, after that they acquired their largest competitor in China, Uber. So they have a near monopoly in their home market.
00:00:41
Overseas expansion may be a factor, so they do have stakes and investments in their partners in different countries. But unless they're planning on buying one of their partners outright, it seems a bit unnecessary to raise an extra 5, $6 billion.>> Even though, overall, venture capital deals like this are slowing down right now, lately a handful of tech funds have raised huge sums of money.
00:01:05
Those sky-high numbers may be partly what's driving up Didi's value too.>> Didi's $50 billion valuation is the latest sign of tech exuberance inflating startup values. And what I mean by that is a lot of tech focused investors have been raising incredible sums of money. So just earlier this month, Silver Lake closed a $15 billion tech fund, which is one of the largest in the US on record.
00:01:32
And of course, you have SoftBank, which is finalizing a massive $100 billion fund. So you have a lot of capital chasing a limited number of deals.>> If this $6 billion drive goes through, Didi's valuation will have jumped up from 35 to 50 billion in less than a year.
00:01:49
A bigger sack of cash is always nice to have, but investors will be watching to see how the company uses it to fuel its next conquest.