China’s Didi Kuaidi invests in Indian peer Ola
China-based ride-hailing app operator Didi Kuaidi has invested an undisclosed sum in Indian counterpart Ola, as part of its latest round of funding.
Two weeks ago, Ola announced it had raised $225 million in funding led by existing investor Falcon Edge Capital, in the opening tranche of a planned $500 million round. Previous Ola investors Tiger Global and SoftBank Corp. also participated, along with six other unnamed investors.
"We welcome Didi Kuaidi as an investor in Ola. We look forward to exchanging learnings from two of the world's largest markets and the tremendous synergies this partnership can bring, towards our commitment of building mobility for a billion Indians," said an Ola spokesperson, TechCrunch reported.
Didi Kuaidi and Ola share a common competitor, Uber, in China and India respectively. The US-based company has been moving aggressively across Asia. It recently received an undisclosed amount of funding Tata Capital to expand in India, while it raised $1.2 billion from investors - including local search giant Baidu - for its China unit.
Uber launched in India less than two years ago and currently operates in 18 cities. With a base of more than 150,000 drivers and business expanding 40% month-on-month, it has gained a market share of over 35%.
Ola, which claims to operate in over 100 cities with a network of 200,000 drivers, closed its previous round of funding in April. It received $400 million at a valuation of $2.4 billion. This was followed two months later by an investment of undisclosed size by Ratan Tata, chairman emeritus of Tata Group holding company Tata Sons. It acquired its rival Indian company TaxiForSure in March and plans to invest $750 million to develop its vehicles leasing service.
A few weeks ago, Didi Kuaidi - the product of a merger between one-time rivals Didi Dache and Kuaidi Dache - closed a $3 billion funding round, said to be the largest ever fundraise by a private internet start-up globally. This was on top of an initial $2 billion round raised in July.
Didi Kuaidi then invested $100 million in Uber's rival in the US - Lyft - as part of strategic alliance between that allows each company to use the other's services. Earlier in the year, it also joined a $350 million round for Southeast Asia-focused taxi-booking app GrabTaxi.
The companies involved in these strategic alliances have some common backers. Alibaba and Tencent, Didi Kuaidi's backers, have invested in Lyft, while SoftBank is Ola's largest investor, as well as an investor in GrabTaxi and Didi Kuaidi. DST Global has interests in Didi Kuaidi and Ola, while Tiger Global backs Ola and GrabTaxi.
Didi Kuaidi's core business is an app that connects passengers and taxi drivers. The company has since expanded into private car hire, carpooling and bus-sharing, and is active in 360 cities across China. It claims to have an 80% share of the private car service market and a 90% share of the taxi-hailing service market, processing three million orders in each category every day.
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