Caution greets Didi's latest fundraising round

China's ride-sharing platform raises a whopping $7.3 billion but investors seek new ways to safeguard their capital.

The latest funding round for Beijing-based Didi Chuxing shows that investors in high-growth technology companies are turning to debt rather than equity amid concerns about lofty valuations and cut throat competition.

Uber’s China rival has just closed a $7.3 billion fundraising, which includes $4.5 billion in equity and $2.8 billion in debt. The latter component comprises a $2.5 billion syndicated loan led by China Merchants Bank and $300 million in debt from China Life.

It is not a route typically employed for tech start-ups since most early stage companies have irregular cash flows and adopt asset-light models, that leave little or virtual no value for creditors in...

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