Didi starts to firm up global network, buys Brazilian partner

Didi Chuxing has bought Brazil’s biggest ride-hailing business 99 for a reported $1 billion.

The deal comes almost a year to the day since Didi took a stake in 99 and started a strategic co-operation. A few days ago, Didi raised $4 billion in equity funding and identified international expansion as one of its aims.

Didi’s founder and CEO Cheng Wei said in a statement confirming the 99 purchase:

“Globalization is a top strategic priority for Didi…We will continue to advance the transformation of global transportation and automotive industries through diversified international operations and partnerships,”

99 currently has three app-based on-demand products – 99Taxi, its core taxi-hailing service covering most of Brazil; 99Top, luxury taxis in São Paulo and 99Pop, a private car service. It has 300,000 drivers on its books, 14 million registered users and operates in more than 400 cities across Brazil.

The price paid is not officially disclosed – the $1 billion figure comes from Brazil’s biggest financial publication Valor Economica.

Didi’s description of the deal as “a significant next step of DiDi’s global strategy” suggests that it might be on the verge of an acquisition spree. It has strategic co-operation agreements and investments in a number of taxi-app/mobility businesses around the globe – Lyft, Ola, Careem and Taxify – and could dip into its cash reserves or raise more financing to increase its holdings or take ownership of these businesses.

Sharing economies of scale?

It is also worth noting that Didi has a stake in Uber. And that Google’s parent company Alphabet has a stake in Lyft. And that Apple has a stake in Didi.  The Venn diagram of taxi-app/mobility investments is even more complicated and interesting when the backers of the taxi app/mobility businesses are also factored in. Sitting at the intersection of many is Softbank, the Japanese investment giant which has a stake in both Didi and Uber (and Ola, and Grab)

Softbank and Uber recently agreed a deal in which Softbank bought out some early Uber investors to give itself a 15% stake in Uber. Softbank is very much at the heart of the taxi-app mobility sector and while its interest is financial, its backing will be increasingly important in deciding the operational direction of its invested companies.


Brazil is, according to some reports, Uber’s second biggest market, and is one region where Uber and Didi (as in, 99) will go head-to-head, with Uber slightly ahead as things stand. The New York Times coverage of Uber CEO’s Dara Khosrowshai’s recent goodwill mission to Brazil said that Uber currently has 500,000 drivers and more than 17 million users in Brazil.

Meanwhile, as Didi talks up its globalization plans, it also needs to keep an eye on what is happening in its own backyard. Having bought out Uber China in 2016, it become by far the dominant player in China. This has not however stopped Meituan-Dianping, a well-funded ecommerce giant, from launching a ride-hailing business of its own.

Reports say that Meituan will launch the business in seven cities, and is offering incentives to passengers and drivers to build the business. Passengers will get discounts on rides while signed up drivers will not pay commission to Meituan for three months.

The launch of a local competitor prompted Didi’s CEO Wei to quote 12th century ruler Genghis Khan:

If you want war, you get war.”

So where’s it all going?

Meituan happens to own a massive travel business in China, having launched Meituan Travel in May 2017. Its latest fundraising round took place in October the same year and was worth $4bn. One of the participants  in the round was Priceline Group which formed a strategic co-operation partnership between Meituan Travel and its own APAC-focused Agoda.com.

It is far too much of a stretch to say that Meituan’s ride-hailing launch means that Priceline Inc is now part of the mobility sector, but the connection – however tenuous – reinforces that the taxi-app/ride-hailing/mobility space is creating some intriguing operational and financial relationships.


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Martin Cowen

About the Writer :: Martin Cowen

Martin Cowen is contributing editor for tnooz and is based in the UK. Besides reporting and editing, he also oversees our sponsored content initiative and works directly with clients to produce articles and reports. For the past several years he has worked as a freelance writer, specialising in B2B distribution and technology. Before freelancing, from 2000-2008, he was launch editor for e-tid.com, the first online-only B2B daily news service for the UK travel sector.



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