Didi confirmed an earlier investment of $100 million in Lyft’s latest round of $530 million. Carl Icahn added an additional $150 million round shortly after. The Tencent and Alibaba-backed Didi quietly invested in Lyft’s latest round of funding in May, placing the rideshare startup at a $2.5 billion valuation.
Didi confirmed the investment number at a press conference held today in New York announcing the international ridesharing collaboration. Both companies are also in talks with India’s Ola and Singapore’s GrabTaxi, though neither were willing to comment on the specifics at this time.
Lyft and Didi apps will now hail rides for visitors in each other’s country. Each service will take payments from its own users, but Lyft will hail a Didi car for U.S. visitors in China and Didi will pull up a Lyft ride for Chinese visitors in the U.S.
China is perhaps the toughest market for Uber’s expansion plans. A number of homegrown taxi hailing services already exist and Didi Kuadi, the largest competitor, formed earlier this year as the strongest contender. It should be noted that the Beijing company covers about 360 cities and shuttles about three million rides per day, or three times as many riders as Uber in China.
Didi is a strong comrade for Uber’s U.S. rival to have, with a valuation of $16 billion and at least $4 billion in its coffers. The Beijing ridesharing giant adds a leg up to Lyft against a rapidly expanding rival.
Alternatively, the partnership is fortuitous for Didi. According to the China National Tourism Association, the number of Chinese travellers visiting foreign countries have grown drastically over the last several years as China’s economy has expanded and its number of moneyed citizens has grown. An estimated 196 million Chinese tourists – more than half the U.S. population – traveled abroad in 2014, spending $140 billion USD. Approximately 2 million of those travelers are estimated to have come to the U.S. last year.
But the partnership is a blow to Travis Kalanick. Uber has been aggressive in its global expansion efforts and Kalanick is keen on a bold extension into China – even developing Uber China as a standalone service in the country.
Kalanick visited Didi this summer and suggested his platform could invest in the dominant Chinese ridesharing service. Cheng Wei, then head of Didi Dache, said rejected the offer.
“His message was they had conquered the whole world and would also conquer China,” Cheng told the Wall Street Journal. “You are earlier than us globally, but there will be a day when we will surpass you.”