Didi Chuxing (滴滴出行) may have just upped the ante in the Chinese bike-rental wars, taking one of the industry’s largest and fastest-growing players under its wing.
The ride-hailing giant yesterday said it has integrated Ofo’s (共享單車) service into its own mobile app, granting the start-up access to the 400 million users across 400 Chinese cities that already use Didi to summon cars and taxis.
That pits it against Tencent Holdings Ltd (騰訊), a prominent backer of Ofo’s archrival, Mobike Technology Co Ltd (摩拜科技).
Photo: EPA
Didi will allow users to rent Ofo’s bright-yellow bicycles from within the popular app.
That is the first step in “extensive” future collaboration as the ride-sharing giant promotes Ofo’s name across China, Didi said in a statement.
The arrangement mirrors the way Tencent’s WeChat (微信) — China’s most popular social media service — integrated Mobike’s service into its wallet interface last month.
Formally known as Beijing Bikelock Technology Co, Ofo has adopted Didi’s take-no-prisoners approach to expansion. It has amassed US$650 million in funding and obtained an estimated valuation of more than US$2 billion.
With backing from Digital Sky Technology and the country’s largest online financial company, Ant Financial Services Group (螞蟻金服), it plans to expand to 20 countries and about 200 cities in China this year. In Mobike’s camp is Temasek Holdings Pte and Hillhouse Capital Management.
Both are taking their rivalry global: Mobile has pledged to expand in Europe on top of expanding to 100 cities in China this year.
The battle, carried out with costly subsidies and even free rides for users, has thrown the industry into bubble territory, Ofo’s cofounder Zhang Siding (張巳丁) said this month. At least 25 companies are providing similar services in China.
Didi is near an agreement to raise at least US$5 billion in a deal that would make it the most valuable start-up in China, according to people familiar with the matter.
The round may close as soon as this week and would lift Didi’s valuation to about US$50 billion, up from a previous US$34 billion after its acquisition of Uber Technologies Inc’s China business, said one of the people, asking not to be identified because the matter is private.
That would make Didi the most valuable start-up in the world after Uber. Didi’s investors include Softbank Group Corp, Silver Lake Kraftwerk, China Merchants Bank Co (招商銀行) and an arm of Bank of Communications Co (交通銀行), the people said.
The deal is aimed at giving the Beijing-based Didi sufficient capital to pursue an ambitious agenda in China and beyond.
While the four-year-old start-up has so far focused on ride-hailing services, it is looking to expand into more countries and invest in technologies from autonomous driving to artificial intelligence.
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