Uber raised another $1.2 billion (£780 million) earlier this month for its expansion into China. Chief executive Travis Kalanick confirmed the funding round on Chinese blogging portal Sina Weibo, claiming it plans to create local teams and partnerships.
“This kind of growth is remarkable and unprecedented. To put it frankly, China represents one of the largest untapped opportunities for Uber, potentially larger than the US,” said Kalanick. “Success in China, however, takes commitment over the long haul and a strong will, coupled with a unique understanding of the differences in China.”
UberChina, the subsidiary that runs the Chinese business, is valued at $8 billion (£5.2 billion) and is expected to hold a local IPO later this year or early next year.
The IPO shows strong commitment to China by Uber, splitting off its business to secure friendship and partnership with the Chinese government and businesses.
Uber needs this friendship with the Chinese government, to relax the amount of police raids on facilities and driver arrests. The mobile taxi service is also working with Hong Kong authorities to make sure this doesn’t happen again, after five drivers were arrested.
Four of the top ten cities for Uber taxis are in China, making it the largest market for the company. It still trails behind Didi Kuaidi, the Chinese taxi giant that controls over 70 per cent of the rides inside of China.
Uber plans to surpass Didi Kuaidi by launching the service in 50 more cities by the end of 2015 and 100 more cities by the end of 2016. It will also invest heavily in the cities it already offers service, to keep commuters coming back for more taxi rides.
Even though a Chinese IPO is on the horizon, Uber’s Western operation does not plan to go public until late 2016 or early 2017.