Weibo, the NASDAQ-listed microblogging company from China, is an unlikely investor in China’s soon-to-merge taxi-hailing services Didi Dache and Kuaidi Dache.
Didi and Kuaidi, two rivals that together are estimated to account for over 95 percent of China’s taxi app market, announced their surprise coming-together in February. Though the deal is not done yet, an SEC filing from Weibo — first reported by Reuters — confirmed it will invest $142 million in the new entity, known as Didi Kuaidi.
Weibo is an unexpected backer, but it already has a strong link with Didi Kuaidi. That’s Alibaba, which is an investor in Kuaidi and also owns shares in Weibo courtesy of a $586 million investment in 2012.
It isn’t exactly clear how Weibo will work with the taxi-failing firm, but there are plenty of pointers to give an idea. Tencent invested in Didi before the merger, and, as part of that deal, it integrated the ride-hailing service into WeChat, its popular messaging app with over 500 million active users worldwide, which gave the service a major advantage over Kuaidi. Similarly, Didi Kuaidi could lean on Weibo to enable customers to summon taxis or make use of other features.
What is clearer, however, is that having China’s top two social services — WeChat and Weibo — in its corner as investors will give Didi Kuaidi yet another advantage over Uber, its biggest rival which took a strategic investment from Chinese search giant Baidu back in December of last year. Thar deal allows Uber to take advantage of Baidu’s maps and search services to raise visibility of its service in China, but it remains to be seen whether that is sufficient to make a dent in Didi Kuaidi’s dominance.