More funding developments in the highly competitive world of car services. Didi Kuaidi, an Uber rival based in China, has today confirmed that it has invested in Ola, another Uber rival based out of India, as part of Ola’s latest round of funding. As we reported earlier this month, Ola is looking to raise a megaround of over $500 million at a valuation of $5 billion to expand in India.
To be clear, the announcement we have just received came directly from Didi Kauidi, not Ola. We have reached out to Ola for more details about the bigger round, but for now all the spokesperson has shared is a terse statement confirming the funding from its side:
“We welcome Didi Kuaidi as an investor in Ola. We look forward to exchanging learnings from two of the world’s largest markets and the tremendous synergies this partnership can bring, towards our commitment of building mobility for a billion Indians,” he noted.
A spokesperson for Didi tells us the companies are not disclosing the amount it is investing but the Times of India, quoting sources, earlier this month reported Didi’s investment and put the figure at $30 million. We have reached out to both companies to try to confirm the figure.
More generally, the investment underscores an interesting strategy being taken by Didi and its backers. As Uber continues to scale up its app-based transport business globally on the back of funding of at least $8.2 billion and a $50 billion valuation (Uber China, a separate entity, has raised at least $1.2 billion of its own), Didi continues to focus on its home market of China for its own business.
Then, in a bid to match Uber internationally, Didi is putting significant funds into Uber competitors in other countries that also remain focused on their local strategies.
“Didi Kuaidi believes both India and China are rapidly developing countries with enormous market potentials,” the company said in a statement on the investment. “Didi Kuaidi looks to engage local industry champions like Ola to share technology and best practices in product development and operational expertise – all honed from deep market data-driven operations.”
Ola is the third such investment of this kind: Didi has also invested $100 million into Uber’s biggest U.S. competitor, Lyft. And it also participated in a $350 million round of funding for GrabTaxi, a rival in Southeast Asia.
On top of this, the various national companies have common investors such as Softbank and DST who clearly are also following the same build-local strategy in competition with Uber.
While Uber is the biggest ride-sharing and taxi-hailing app in its home market of the U.S., the story is not as cut and dried elsewhere.
In India, Ola — founded in 2011 by Bhavish Aggarwal and Ankit Bhati — claims to have 80 percent of the market (a percentage Uber strongly disputes), and the company says it completes 750,000 rides each day on its network of 320,000 cars across 100 cities.
Didi, meanwhile, says it serves 200 million people in China with 7 million rides completed daily. It claims to have a whopping 99 percent of the Chinese market for taxi hailing, and 82 percent of all private car hailing. It also is looking for ways to branch out into the next wave of users and technologies, as evidenced by a recent partnership with LinkedIn to share data on rides and recruitment for new projects.
This is before considering the various regulatory battles that Uber and others are facing in local markets against often-strong incumbent taxi lobbies and others.
At the time of our earlier report on Ola’s latest funding, the startup had raised $225 million, with investment already confirmed from Falcon Edge Capital as the lead investor, with Tiger Global Management, Softbank Corp., Hong Kong’s Steadview Capital, Pittsburgh’s ABG Capital and the FII LTR Focus Fund — all previous investors — also involved. New investors include JS Capital (M) Ltd, Parkwood Bespin, and Daniel E. Neary.
Ola has raised just under $1 billion according to CrunchBase. Uber has committed to investing $1 billion by the first quarter of 2016 to grow its business in India.
Ola’s services in India include traditional taxi services, rickshaws and shuttle services. The company has also kicked off a leasing plan to encourage more drivers, and it has also just in the last couple of days opened up its APIs so that developers can start to embed Ola ordering functionality into other apps (a move Uber also has made).