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Updated: Uber sells China biz to competitor Didi Chuxing

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Update: Uber has put out a blog post saying that it is merging its Uber China business into Didi Chuxing. Uber does not mention the financial details of the transaction, nor if Uber will remain a standalone app and business or be merged into Didi Chuxing.

Earlier today: Uber is looking to merge its China business with Chinese competitor Didi Chuxing (formerly known as Didi Kuaidi), according to a report in Bloomberg, taking the valuation of the combined entity at $35 billion. The report is source based and adds that Uber China investors will hold a 20% stake in the company, and that Uber will continue as an independent app. Didi Chuxing will reportedly invest $1 billion in Uber China, making Uber’s valuation at $68 billion. Recode reports that it has “confirmed the transaction” but does not have any official statements from either Uber or Didi.

The Bloomberg report cites a blog post written by Uber CEO Travis Kalanick but the blog is not yet published on Uber’s blogs. In it, Kalanick says that despite investing billions of dollars in China, both Uber and Didi are ‘yet to turn a profit.. which is the only way to build a sustainable business in the long term.’ Uber has apparently lost $2 billion in China, while being profitable in its developed markets.

What happens to the global anti-Uber alliance?

What’s interesting is that Didi Chuxing is an investor in Indian taxi aggregator Ola, which is locked in a fierce and sometimes ugly battle with Uber, with Uber having taken Ola to court over false bookings, and Ola accusing Uber of being anti-national. Ola is also a part of a global anti-Uber alliance with American company Lyft, Didi from China, GrabTaxi from Singapore. This alliance now seems pointless from the perspective of competition, given that Didi also has investments (details below) in Lyft as well as GrabTaxi. In April, American Lyft users could get a cab in China through Didi and GrabTaxi in Southeast Asia.

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Apple’s Didi investment

In May this year, Apple pumped in $1 billion in Didi Chuxing to understand the Chinese market, make future collaborations and to get a strong return on its investment. Apple’s stake in the company is yet unknown. This was Didi’s single largest funding ever, in addition to the $7 billion it has raised previously.

Didi statistics

– In January this year, Didi Chuxing claimed that it had completed 1.4 billion rides in 1 year.
– It claims to do 11 million rides every day and has an 87% market share in private car-hailing in China (source unknown).
– It claims to have 300 million users in 400 cities in China.
– Didi already has investments from Alibaba, DST Global, Tencent Holdings and Temasek Holdings among others.
– In September 2015, Didi took part in Ola’s $225 million round of funding.
– Didi has also invested $100 million into Lyft and participated in a $350 million round of funding for GrabTaxi.

Uber statistics

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– Last month, Uber completed 2 billion rides globally in 6 years since its inception.
– Globally, Uber said that 100,000 users used UberPOOL weekly in 11 cities including New York, Los Angeles, Beijing, Chengdu and Shanghai.
– In China, 30 million users use UberPOOL monthly (7.5 million weekly).

Uber’s funding

In June, Uber raised $3.5 billion from the Saudi Arabian Public Investment Fund as a part of its global fund and would be utilised in strategic markets like India. Mint reported that the $3.5 billion raised was part of a $5 billion round.

Our online cab aggregators coverage.

Image Credit: Counselman Collection under CC BY SA 2.0

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Written By

I'm a MediaNama alumna from 2015-16 (remember TinyOwl?) now back to cover e-services like food and grocery delivery, app based transport and policies, platforms and media in India.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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