Earlier today, we reported that Didi was in the process of acquiring 99, a ridesharing company in Brazil, and now the two companies have confirmed the deal as part of Didi’s plans to expand its service into Latin America.
Terms of the deal were not disclosed — we are asking — but earlier today we noted that Didi was effectively putting in $900 million — $600 million to buy out investors, plus an additional $300 million of further investment into the business and its expansion plans — effectively giving the company a valuation of $1 billion (after you add in Didi’s original $100 million investment in 99 in January of last year).
The deal gives Didi — through its partnerships with other companies like Grab and Lyft, franchises such as in Taiwan, and through its direct ownership of services in China — coverage in 1,000 cities, touching more than 60 percent of the world’s population. It says it currently has 450 million users of the Didi app.
“The success that founders and team of 99 have achieved in Brazil embody the very spirit of entrepreneurship and innovation in the LatAm region,” said Chen Wei, Founder and CEO of DiDi, in a statement. “Building on the deep trust between our two teams, this new level of integration will bring to the region more convenient, value-added mobility services.
“Globalization is a top strategic priority for DiDi. With enhanced investments in AI capabilities and smart transportation solutions, we will continue to advance the transformation of global transportation and automotive industries through diversified international operations and partnerships,” he added.
“We feel privileged to be now a single organization with an even stronger purpose: improve the transportation industry and massively impact the lives of billions of people worldwide,” said Peter Fernandez, CEO of 99, in a statement. “We are confident that being part of Didi Chuxing will vastly enhance our capability to expand our services throughout Brazil to bring critical value to users, drivers and cities.”
This is a significant move also because up to now, Didi has primarily been focused on taking investments in like-minded regional leaders rather than acquiring them outright. Its last major acquisition was buying out Uber in China in 2016, to help consolidate its leadership in that market and wipe out some of the huge (and costly) effort of competing with Uber.
The company is reportedly also now looking to move deeper into bike sharing, reportedly also just today buying a bike-sharing startup in China, Bluegogo. It also invested in another bike startup, Ofo.
We’ll update this story as we learn more.