August 28, 2015 / 6:30 AM / 2 years ago

Uber China closes $1 billion fundraising round: sources

A taxi is reflected in a window at the office of taxi-hailing service Uber Inc in Hong Kong, China August 12, 2015. REUTERS/Tyrone Siu

BEIJING/SHANGHAI (Reuters) - Uber Technologies Inc’s China arm has closed its $1 billion fundraising round early, according to two people with knowledge of the matter, with investors still hopeful for the U.S.-based ride service despite strong domestic competition.

Investors in Uber’s Chinese unit include Internet giant Baidu Inc, China CITIC Bank Corp Ltd and China Life Insurance Co Ltd, among others, said one of the people, requesting anonymity because they were not authorized to discuss the matter publicly.

Chinese financial conglomerate Ping An Group’s investment arm and Hillhouse Capital, which has a stake in the main U.S.-based Uber business, also took part, the person said.

However, a representative of Ping An’s investment team said they did not invest in the China unit. Hillhouse was also not an investor, said a third source who declined to be identified because of the sensitivity of the subject.

A spokeswoman for Uber declined to comment.

With the close of the $1 billion round, Uber is re-lining its war chest for a drawn-out battle with Chinese car-hailing app rival Didi Kuaidi, which last month raised $2 billion.

The two are locked in a turf war, spending heavily on subsidies to lower the cost for users and inflate the money earned for drivers of their services.

The deal was oversubscribed, said the second source directly familiar with the fundraising. According to a fundraising document seen by Reuters last week, this round values Uber China at $7 billion, with the unit planning to list on the mainland by 2020.

Additional reporting by Shu Zhang; Editing by Meredith Mazzilli and Stephen Coates

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