A year ago, Didi made a big move into Brazil when it laid down over $100 million to take a stake in 99, a local competitor to Uber in the app-based ride hailing market. Now, on the heels of getting a massive $4 billion investment of its own, it appears that Didi is looking to double down the Latin American region. According to several local reports, Didi is buying the Brazilian ridesharing startup, in a deal that values 99 at $1 billion.
A spokesperson for 99 said he was not authorized to talk with us but that there could be more news later. Didi did not respond to a request for comment but a source close to the company confirmed the companies were talking and “exploring options.”
What is not clear is, if this deal closes out, whether this will be an all-out acquisition or a matter of Didi taking a controlling (but not fully acquired) share. An all-out acquisition would be an interesting, and pretty aggressive, turn for Didi, which has to date mostly focused on investing in comparable regional startups rather than buying them outright. Other ridesharing companies that Didi has invested in include Grab in Southeast Asia, and Careem in the Middle East.
To date, Didi has made only three acquisitions to grow, all in its home market of China. It’s reportedly also now also buying a bike-sharing startup in China, Bluegogo, after investing in another bike startup, Ofo. Didi has not officially announced any deal with Bluegogo (although we are asking and will update as we learn more).
The news of the acquisition was published first in financial publication Valor (in Portuguese and behind a subscription wall), which reported it as a done deal. According to the report, Didi is putting $600 million into 99, picking up shares from previous investors that include Riverwood Capital, Monashees, Qualcomm Ventures, Tiger Global and Softbank in the process; and adding in an additional $300 million on top of that to fuel regional expansion.
Prior to this, 99 had raised around $240 million from 11 investors, according to Crunchbase.
When Didi made its original investment in 99 last January, it drew comparisons between Brazil and China in terms of their economic potential and how that would impact the growth of services like ridesharing.
“China and Brazil are the world’s foremost emerging markets with enormous opportunities for our rideshare industry,” Didi CEO Cheng Wei said at the time.
Regional expansion beyond Brazil has long been on the cards for 99. The startup said at the time of Didi’s original investment that it would use the funding to expand across the rest of Latin America, in competition not just with Uber but more local players like EasyTaxi and Cabify (which itself reportedly tried to buy 99 at one point before Didi made its move, and now has teamed up with EasyTaxi).
The regional growth strategy also appears to align with Didi’s own interests. Just last month, the company was reported to be prepping an entry into Mexico alongside expansions in its Asian home market, most recently expanding into Taiwan through a franchising model.
We will update this story as we learn more.