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China’s two largest taxi-hailing applications, backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd., have announced a merger.
Hangzhou Kuaidi Technology Co., known as Kuaidi Dache, completed an alliance with Didi Dache, according to a joint statement e-mailed on Saturday, which didn’t name the merged entity. A briefing will be held after the week-long Lunar New Year holiday that begins in China on Feb. 18.
The deal will create China’s biggest mobile platform for local transportation by users, the companies said, even as Chinese regulators cracked down on car-hailing apps including San Francisco-based Uber Technologies Inc. The Transportation Ministry last month banned private vehicles from acting as taxis while also endorsing services using licensed vehicles and drivers such as those provided by car-rental firms.
Kuaidi’s investors include Alibaba and Japan’s SoftBank Corp. Its Chief Executive Officer Dexter Chuanwei Lu and Wei Cheng, the chief executive of Didi, will become co-CEOs of the combined company, according to the joint statement. The new firm will conduct business under the separate brands, it said.
Tencent, an investor of Didi, would be the largest shareholder in the combined company, which may have a valuation of about $6 billion, people familiar with the matter said on Feb. 13. Kuaidi last month raised $600 million from investors including SoftBank, Alibaba and Tiger Global Management, funding that was said to give it a valuation of more than $2 billion.
The merger also comes less than two months after Baidu Inc., the owner of China’s biggest search engine, agreed to buy a stake in Uber. With more than 500 million people in China using mobile phones to access the Web, the nation’s three largest Internet companies are stepping up the competition to offer services and win customers.
To contact the reporter on this story: Aibing Guo in Hong Kong at email@example.com To contact the editors responsible for this story: Stanley James at firstname.lastname@example.org Yee Kai Pin, Chan Tien Hin
This article was written by Aibing Guo from Bloomberg and was legally licensed through the NewsCred publisher network.