Issue 17 | December 26, 2017

Didi Raises $4 Billion at Valuation Comparable to Uber’s
Didi Chuxing, a GGV portfolio company, announced last week that it has completed a $4 billion funding round to beef up its AI capacity, expand internationally, and develop electric vehicles.

According to The Wall Street Journal, investors in Didi’s new funding include SoftBank Group (already a major investor in Didi) and Mubadala Investment Co., a United Arab Emirates state fund.

The latest round reportedly gives Didi a valuation of $56 billion, which is likely to be comparable to Uber’s current valuation. While Uber’s valuation was roughly $68 billion based on its last funding round in June 2016, SoftBank Group is reportedly offering to purchase shares of Uber from existing investors at a valuation of $48 billion, a 30% discount to its most recent valuation. SoftBank is also expected to make a separate $1 billion investment in the company at the $68.5 billion valuation. Taken together, the two investments effectively revalue Uber at around $51 billion—similar to Didi’s current valuation.

Didi was founded in 2012, while Uber was founded in 2009. It is worth noting that it took Didi three years less to achieve a valuation comparable to Uber’s. Didi offers its services primarily in China, with just strategic investments in transportation companies in other emerging markets including Grab (Southeast Asia), Ola (India), and 99 (Brazil). Didi also owns a small stake in Uber. On the other hand, Uber operates its services directly in most markets outside of China, and owns a stake in Didi as a result of selling its China operations to Didi last year. Our takeaway is that the ride-sharing industry in China “leapfrogged,” thanks to mobile Internet, which is making a larger impact in China than anywhere else in the world. (We will examine this phenomenon in greater detail in a future blog post.)

Interestingly, Uber’s lowered valuation is partly caused by SoftBank’s earlier investments in Uber competitors in many emerging markets, including Didi in China, Grab in Southeast Asia, and Ola in India. Now, SoftBank is getting a deal by investing more in Uber at a discount, as well as encouraging leading local competitors to buy Uber’s assets in their respective countries, as in the Didi-Uber China deal in 2016. Could SoftBank end up being the biggest winner in global ride-sharing apps?

Tencent and Invest $863 Million in Vipshop
Tencent teamed up with Alibaba’s chief e-commerce rival,, to invest $863 million in the online fashion retailer Vipshop (NYSE: VIPS; market cap $7.2B). Vipshop is the third largest e-commerce platform in China, accounting for 3.2% market share at the end of Q3 2017, according to Analysys.

The deal represents Tencent’s latest foray into retail, the core market of its chief rival Alibaba. Tencent is already the largest shareholder of, the second-largest e-commerce player in China after Alibaba. Last week, Tencent bought a 5% stake in the brick-and-mortar supermarket chain Yonghui Superstores (永辉超市 yǒng huī chāo shì) for $639 million. is traditionally known for its strength in 3C products (computer, communications, and consumer electronics), and most of its sales currently come from men. Vipshop, on the other hand, is known for fashion and is popular among female users, a demographic would like to reach. In return, Vipshop will gain access to Tencent’s WeChat and’s large volume of users by being included in both apps.

Huawei Will Sell Phones in the US Next Year
Huawei said it will sell its smartphones through US carriers next year, increasing its presence in the home market of competitor Apple. Huawei plans to release its Mate 10 smartphone with AT&T in early February, according to The Information, and is slated to spend more than $100 million on US marketing next year.

As of Q3 2017, Huawei accounted for 9.8% of global smartphone shipments, trailing closely behind Apple, which accounted for 11.7%. “We are a top 3 smartphone supplier, but we are very close to the top 2, so maybe quickly we can be top 2,” said Richard Yu, the president of Huawei’s consumer business.

Huawei’s expansion into the US has suffered regulatory setbacks. In 2013, the US House Intelligence Committee recommended phone carriers avoid using equipment supplied by Huawei or ZTE (another Chinese company) due to potential security concerns.

Yu said he will announce more details at January’s Consumer Electronics Show (CES) in Las Vegas.

Speaking of CES…..
If you are coming to CES, you’re invited to the GGV Capital-ZhenFund CES Reception—an evening of cross-border networking, insights, and fun. The hosts, Hans Tung (managing partner at GGV Capital) and Anna Fang (partner and CEO at ZhenFund), will host a fireside chat with exclusive VIP guests you won’t want to miss. And, of course, you’ll meet the authors of this newsletter. Space is limited; please register at the link below.

Time: 7-10pm, Tuesday, January 9, 2018
Location: Las Vegas (the specific location will be included in the confirmation email)
Register at