China’s largest ride-hailing company, Didi Chuxing, has been reinforcing its global presence since the beginning of 2017 as its American rival, Uber, is encountering setbacks both inside the company and in international markets.
Didi has announced at least three major international deals this year that will help it to fulfill its global ambition.
On August 1, Didi announced an undisclosed amount of investment into Estonian ride-sharing company, Taxify, which has over 2.5 million users and claims to be operating in 25 cities and 18 countries Europe, West Asia, Africa, and Mexico. Didi said it would collaborate with the company to support its further growth and innovation in these markets.
Just one week before Didi’s investment in Taxify, the company made another investment in Grab, an on-demand transportation and mobile payments platform in Southeast Asia. On July 24, DiDi and Japan’s SoftBank Group announced that they would jointly invest up to USD 2 billion in a financing round anticipated to reach up to USD 2.5 billion. Their investment in Grab is meant to develop their transportation and financial products.
Previously, in 2015, Didi also participated in a Grab financial round worth USD 350 million. At present, the Southeast Asia startup boasts a market share of 95% in third-party taxi-hailing and 71% in private vehicle hailing in the region. It offers services across seven countries and 65 cities, dealing with nearly three million rides daily.
Earlier this year, Didi led a USD 100 million financing round of the Brazilian ride-hailing company, 99, and joined the latter’s board committee.
Didi’s international expansion is one of its key strategies this year. In February, Didi announced that it will establish an international business unit in an internal letter written by CEO Cheng Wei and president Jean Liu.
“The international business unit will help to promote the products, technologies, and services that we have explored in China to global markets, serving more people and cities,” they wrote in the letter.
Didi began reaching for global markets even before the establishment of its international business unit. In 2015, it lobbied American ride-hailing company, Lyft, India’s Ola, and Grab to form a union to face off against Uber. It has also invested more than USD 100 million in Ola and Lyft.
Didi’s frequent expansions come as its American adversary, Uber, undergoes internal turmoil and external setbacks.
On June 21, Travis Kalanick, the cofounder and CEO of Uber, resigned as the company’s top executive after numerous internal scandals that had plagued the company for months. Before Kalanick stepped down, Uber had also lost its COO, CFO, and CMO.
Uber is also facing external challenges. On July 13, it announced that it would merge its local business with Yandex.Taxi, a ride-hailing subsidiary under Russian search giant Yandex. Furthermore, Uber announced that it will suspend its service in Macau four days after withdrawing from the Russian market.
One year ago, Uber sold its China operations to Didi in exchange for USD 1 billion to be invested in Uber global and a 17.7% equity stake in the combined Chinese entity.
At present, Uber operates in nearly 600 cities in 70 countries and is valued at up to USD 68 billion. DiDi, by comparison, is valued at USD 50 billion, with 400 million customers in 400 cities in China. They are the top two most valuable startups in the world.
(Top photo from Baidu Images)