The merger is essentially a marriage between three camps: Tencent, Alibaba, and Softbank (the latter two backed Kuaidi). Tencent and Alibaba are rivals with Baidu, which invested in Uber
Rumors swirled around yesterday of the merger between Kuaidi Dache and Didi Dache, the top two taxi apps in China. The news was confirmed officially today via a press release on Kuaidi Dache’s Weibo account. Financial details were not disclosed.
Sharing a cab to take on Uber
The chief executives of both companies, Chuanwei Lu of Kuaidi and Wei Cheng of Didi, will become co-CEOs of the merged entity. Both teams and their branding will remain separate, but they will combine resources and talent to build a better platform for the transportation industry, says the announcement.
Didi Dache, apparently the leading taxi app in China, trails only Uber in the space in terms of fundraising after it received an investment of US$700 million in a round led by Singapore sovereign wealth fund Temasek, along with DST Global. Chinese Web giant Tencent also joined. Both apps are dominant in China, holding nearly 100 percent market share of taxi apps.
The press release hints that the move is aimed at global expansion. Kuaidi’s CEO said in the announcement that the internet, especially on mobile, offers the best chance for Chinese companies to expand abroad. If so, they are set on a collision course with Uber in a struggle for global domination.
Battle of the portfolios
The merger is essentially a marriage between three camps: Tencent, Alibaba, and Softbank (the latter two backed Kuaidi). Tencent and Alibaba are rivals with Baidu, which invested in Uber. Softbank also invested US$250 million in GrabTaxi, a leading taxi app in Southeast Asia.
More details on the merger will be announced after China’s New Year.
Before Didi raised its US$700 million round, it raised a US$300 million series C round in early 2014. Kuaidi received US$600 million in the beginning of 2015, which followed a US$25 million series C round.
This post was originally published on Tech in Asia
Photo Credit: Shutterstock/ Blue taxi sign in Shanghai, China