China’s Weibo invests $142m in local taxi-booking platform

Sina Corporation-controlled Weibo said in a regulatory filing that it was investing through Xiaoju Kuaizhi, the equity partnership created to hold the two companies. The merger was announced in February, although it has yet to receive regulatory approval. Didi and Kuadi will still operate independently under separate brands but will combine resources and personnel with a view to building a stronger platform.

The companies dominate China's taxi app market. Analysys International estimated that 154 million people used a taxi-booking app in the third quarter of 2014, with Didi enjoying a 55% market share and Kuaidi claiming almost all the rest.

The companies amassed substantial amounts of private funding in their battle for supremacy. In January, Kuaidi, which is backed by Alibaba Group, raised a $600 million round of funding led by Softbank and existing backer Tiger Global Management. This followed a $700 million round completed last December for Tencent Holdings-backed Didi Dache, which won support from Temasek Holdings, DST Global, GGV Capital and other investors.

Didi and Kuaidi primarily digital intermediaries for taxi companies in China, but both have expanded into private car booking services, offering rides in Audi and Mercedes-Benz vehicles to high-end customers. It puts them in direct competition with car-sharing platform Uber and local incumbent Yongche. Uber announced a partnership with search giant Baidu last December to further its business in China.

Weibo raised $285.6 million in its US IPO in April 2014. Sina holds a 56.1% interest in the company, while Alibaba owns 31.4%. Alibaba invested an initial $585.8 million a few weeks after Weibo went public, taking an 18% stake, with an option to increase it to around 30%.

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• Topics
• Expansion
• Greater China
• Technology
• Consumer
• TMT
• China
• Consumer
• Growth capital
• Alibaba Group
• Transportation