China's Baidu confirms investment in Uber
Chinese search engine Baidu has confirmed that it is the latest investor in Uber, the online car-ordering service that has raised an estimated $3.3 billion since its inception.
The Baidu investment is part of a broader strategic cooperation agreement between the two firms. It will see Uber integrated into Baidu Map while Baidu Mobile is configured so that Uber is displayed prominently in response to relevant searches.
The agreement was announced by Uber CEO Travis Kalanick and Baidu chairman and CEO Robin Li at a signing ceremony at Baidu's headquarters in Beijing. Kalanick said the collaboration represents a milestone for Uber, which has a presence in 250 cities globally and is looking to grow in Asia.
"Uber's rapid growth in the last four years is testimony to the tremendous demand for easy, reliable, and inexpensive transportation. We're delighted that we can work together to help meet that demand-and we're excited by this pioneering strategic partnership between a Chinese and an American Internet company," Li said in a statement.
Uber currently operates in nine cities in China: Beijing, Shanghai, Tianjin, Chongqing, Shenzhen, Guangzhou, Wuhan, Chengdu, and Hangzhou.
The leading players in China's car rental market are China Auto Rental and eHi, both of which received PE and VC funding and went public this year. The company with arguably the closest business model to Uber is Yongche, which offers car rental and taxi-booking services, contracting vehicles from smaller car rental companies. It received a Series C round in September from GIC Private.
Kuaidi Dache and Didi Dache are the dominant forces among the taxi-booking app platforms. The former is allied with Alibaba Group - passengers can make payments through Alipay - while the latter counts Tencent Holdings among its investors. Earlier this month, Temasek Holdings, DST Global and Tencent invested $700 million in the company.
Uber was launched in San Francisco in 2009 and has received at least seven rounds of funding across the seed, angel and institutional stages. Investors include Benchmark, Goldman Sachs, TPG Capital's growth equity division and Google Ventures.
In early December, Uber announced it had raised a $1.2 billion round of funding, with additional capacity remaining for strategic investments. It said the financing would allow the company to make substantial investments, particularly in the Asia Pacific region.
The round reportedly valued Uber at $40 billion with the participants said to include Qatar Investment Authority, Valiant Capital Partners and Lone Pine Capital. Baidu appears to have taken up some or all of the additional capacity, although the size of its investment has not been disclosed.
Uber initially offered only luxury cars for hire, now known as the UberBlack service. This has been joined by UberX, which includes any qualified driver with an acceptable vehicle.
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