Uber’s China rival backs Ola

Shanghai/Beijing: China’s most popular ride-hailing app Didi Kuaidi said on Monday that it has invested in Indian peer Ola, forging a new alliance within a network of companies challenging US rival Uber Technologies Inc.

The company, however, did not disclose the investment amount. Ola has been in talks with investors to raise over $500 million (Rs 3,320 crore). In April this year, Ola had raised $400 million (about Rs 2,500 crore) from a clutch of investors led by DST Global.

The funding will help the Indian taxi-aggregator grow in smaller cities and compete head-on with rivals like US-based Uber and home-grown Meru. “We welcome Didi Kuaidi as an investor in Ola. We look forward to exchange learnings from two of the worlds largest markets and the tremendous synergies this partnership can bring, towards our commitment of building mobility for a billions of Indians,” an Ola spokesperson said.

Didi joins existing Ola investors including Soft-Bank Corp, Falcon Edge, Singapore sovereign wealth fund GIC and Tiger Global Manage-ment. SoftBank is the common investor backing most of the firms that are taking on Uber across Asia and in the United States. The Japanese telecom conglomerate already had stakes in Didi, Ola and Southeast Asian firm GrabTaxi.

Didi has also invested in Uber’s US rival Lyft, which shares common investors with the other companies, including Chinese e-commerce titan Alibaba Group Holding Ltd. Ola controls 80 per cent of India’s taxi-hailing business, and completes more than 750,000 rides per day, according to Monday’s statement.

Last month, Uber said it plans to average more than one million rides a day in India over the next six to nine months as it steps up investments to take on Ola. In August, GrabTaxi said it had also raised money from Didi, which recently conducted a $3-billion fundraising round.

Uber and its biggest rival Didi are locked in a subsidy-intensive fight for market share in China, one that is costing them each hundreds of millions of dollars. In February this year, Didi Dache and Kuaidi Dache, two of China's leading taxi-hailing apps, had announced their merger to create one of the world's largest smartphone-based transport services firm “Didi Kuaidi”.

Established in 2012, Kuaidi Group has a peak of six million daily ride requests and focuses on city-bound travel covering nearly 300 cities in China, including Hong Kong. Didi Kuaidi is backed by Chinese Internet giants Tencent and Alibaba Group.