China Merchants Bank to invest in Didi Kuaidi
China Merchants Bank (CMB) has agreed to invest in Chinese ride-hailing app Didi Kuaidi, and to create a strategic partnership with the company as well.
The size of CMB's investment was not disclosed, but media reports have put it at $200 million. This investment is part of the $3 billion round that Didi Kuaidi raised last year; the company's valuation following the overall funding round is reportedly $16.5 billion.
The partnership with CMB will allow Didi Kuaidi to offer in-app credit card payments and co-branded credit and debit cards. These will be available through CMB's sales channels and Didi Kuaidi's app in the second quarter of 2016.
CMB will also provide financing services for Didi Kuaidi's drivers - currently numbering about 14 million - to help them purchase new cars. Terms of the financing service will be determined by a regular joint review between the two companies.
CMB's partnership with Didi Kuaidi gives it exposure to the online payment ecosystem, which has been dominated by the Alibaba Group's Alipay and Tencent's Wepay. For Didi Kuaidi's part, in addition to financial assistance to its drivers and more payment options for its customers, the company will also gain access to the bank's corporate financial services.
Didi Kuaidi, the result of a merger last year between rival ride-hailing apps Didi Dache and Kuaidi Dache, is the dominant player in China's taxi-booking space. The company has expanded into car-pooling, vehicle rental, designated driver services, and private car booking. It offers some of these services in 400 cities.
The company closed a record-breaking funding round of $3 billion last September. Its backers include Alibaba Group, the principal supporter of Kuaidi Dache before the merger, and Tencent, the main supporter of Didi Dache, along with Temasek Holdings, China Investment Corporation, and Ping An Ventures.
Didi Kuaidi is one of the main global rivals of US-based Uber. It announced a strategic partnership in December with Uber's other rivals worldwide, including India's Ola, to which it committed an undisclosed amount of funding last September.
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