Business / Companies

Didi Kuaidi makes overseas move

By Meng Jing (China Daily) Updated: 2015-08-20 08:13

Didi Kuaidi makes overseas move

A Chinese mobile phone user uses the taxi-hailing app Didi Dache backed by Tencent on his smartphone in Shanghai, Oct 16, 2014. [Photo/IC]

Didi Kuaidi, China's largest mobile-based car-booking company, has made its first move overseas by investing in a taxi-hailing service provider that operates across Southeast Asia.

The Beijing-based company has invested in GrabTaxi Holdings Pte Ltd, a tech firm headquartered in Singapore that provides booking services in 26 cities in six countries.

Didi Kuaidi did not reveal details of its investment, but GrabTaxi confirmed in a statement it had secured total new funding worth more than $350 million from investors, including Didi Kuaidi, hedge fund Coatue Management LLC, and sovereign wealth fund China Investment Corporation.

Liu Qing, Didi Kuaidi's president, said the investment would help the two companies learn from each other and make further developments in their respective businesses.

"Didi Kuaidi can share its experience of providing multiple transportation services on an integrated platform, while GrabTaxi can help us understand users in Southeast Asia," said Liu.

Analysts said taking equity stakes in overseas companies rather than building its own operation in other markets was a smart move by Didi Kuaidi to increase revenue.

Wang Xiaofeng, a tech analyst at Forrester Research Inc, said Didi Kuaidi is already the No 1 player in China's online car-booking sector.

"To maintain its high-speed growth momentum, it has to come with solutions to gain new markets," she said.

Didi Kuaidi has been aggressively expanding its platform since February by launching various transport solutions, including taxi-hailing, private car and ride-sharing, chauffeur and bus services.

"It has a growing presence across the entire transportation service sector. The question is what's next?" said Wang, who noted that Liu Qing is well aware of what it takes to invest in other businesses, having worked for 12 years at investment bank Goldman Sachs Group Inc.

Zhang Xu, an analyst with Internet consultancy Analysys International, said that growth of Didi Kuaidi's operation in China is expected to plateau, given its already dominant position in the market.

Didi Kuaidi claimed in a statement on Wednesday that it now has 99 percent of China's taxi-hailing sector, and 82 percent of the chauffer market.

"It needs to find new areas of development. By investing in a leading player in Southeast Asia, it can avoid competing with existing players, and the difficulties of adjusting to a new culture, a new policy environment, and to a new group of users," said Zhang, who considers GrabTaxi a fast-growing company in a fast-growing market.

GrabTaxi said the investment would allow it to expand its widely available GrabCar private car hire service, and its GrabBike motorcycle taxi-booking service, which is currently available in Vietnam, Indonesia and Thailand.

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