Two popular taxi-booking apps backed by Chinese tech behemoths Alibaba Group Holding Ltd (阿里巴巴) and Tencent Holdings Ltd (騰訊) yesterday announced they would merge to create a new company reportedly valued at US$6 billion.
Kuaidi Dache (快的打車) — part-owned by Alibaba — and Didi Dache (滴滴打車) — backed by Tencent — together control 99 percent of China’s domestic market for booking taxis by smartphone, with apps developed along similar lines to San Francisco-based Uber Inc.
The new group will be jointly overseen by both firms’ current man agement teams, and will maintain separate products and branding, they said in a statement.
Financial details were not disclosed.
The apps, both launched in 2012, allow users to book and pay for a taxi by smartphone using geolocation software.
The new entity could be worth more than US$6 billion, according to sources cited by Bloomberg News, and represents a rare instance of cooperation in the fierce rivalry between their backers.
Investment in car-hailing apps has become a proxy war among China’s Internet giants.
Kuaidi Dache raised US$600 million for expansion last month, with heavyweight investors including Japan’s Softbank Corp and investment firm Tiger Global Management LLC, as well as Alibaba.
Tencent, operator of the popular messaging app WeChat, has invested heavily in Didi Dache.
In December last year, the research firm Analysys International estimated Kuaidi Dache controlled 56.5 percent of a market containing hundreds of millions of users, while Didi Dache claimed 43.3 percent.
The announcement comes as Uber seeks to crack the current duopoly in China, after receiving significant financial backing of an undisclosed amount in December last year from Baidu Inc (百度), a Chinese Internet search giant.
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