VC-backed eHi Car Rental invests in China’s Kuaidi Dache
Chinese car rental firm eHi Car Services, which has several VC backers and is targeting a US IPO, has invested $25 million in Kuaidi Dache, one of the country’s two dominant taxi-booking apps.
EHi states in its IPO prospectus that it has participated in a Series B round of funding for Travice Inc, developer and operator of Kuaidi, and now holds an 8.4% interest in the business. It also has a warrant to purchase further shares at the Series C stage.
As part of the deal, eHi and Kuaidi formed a cooperative arrangement whereby eHi's premium car services will be made available through the Kuadi platform. Established in 2006, eHi is the second-largest car rental services provider in China. It has a fleet of more than 15,000 vehicles covering over 90 cities.
As of June, the firm had 550,000 registered members and over 32,000 corporate clients. It derived two-thirds of last year's revenue from rentals, with the rest from chauffeured car services.
EHi first received VC funding in 2006 with a $5 million investment from Ignition Partners and Qiming Venture Partners. It has since raised a further $260 million across multiple rounds from Qiming, Ignition, CDH Investments, Jafco Asia, Goldman Sachs, New Access Capital, US car rental firm Enterprise Holdings and Ctrip International, China's largest online travel agency.
Ctrip has a 23% stake in the business, with Enterprise Holdings on 21.7%, CDH on 12.9%, Qiming on 11.9%, Goldman on 10.7% and Ignition on 9.1%.
Kuaidi's principal backer is said to be Alibaba Group, which allows users to pay for taxi services through Alipay. The company is in a brutal fight for market share with Didi Dache, which earlier this year reportedly received a $100 million Series C round led by CITIC Private Equity. Tencent Holdings is also an investor in the company.
Kuadi and Didi connect prospective passengers with vacant taxis. The passenger requests a taxi via the app and has the option of adding a discretionary tip to incentivize the driver. Other rival services include Yaoyao Zhaoche and Dache Xiaomi.
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