China’s Didi looks to Latin America with $100M investment in Brazil-based Uber rival 99
There’s much talk of Didi Chuxing’s desire to expand overseas now that it has agreed to gobble up Uber’s China business, and it just took a big step to extending its international reach via a maiden deal in South America. Didi announced today that it is making an investment in Brazil-based taxi on-demand service 99. Didi has led a new round the value of which is undisclosed, though a 99 spokesperson said it is in excess of $100 million. Formerly known as 99Taxi, 99 said it plans to use the money to expand its service into other countries in South America but it is also focused on winning Brazil, the world’s fifth largest country with a population of 200 million. “China and Brazil are the world’s foremost emerging markets with enormous opportunities for our rideshare industry,” Didi CEO Cheng Wei said in a statement. The Chinese firm known for striking strategic investment deals with other companies battling Uber. It has invested in Lyft in the U.S., Ola in China and Grab in Southeast Asia — thus creating the so-called ‘Anti-Uber Alliance’ — and the deal with 99 now extends its interests and relationships to a new continent. Uber is present in South America but, to date, it hasn’t made as much of a push there as other parts of the world, although it does plan to double its presence in the region in 2017. 99 was founded in Brazil in 2012 and it currently claims to cover 550 cities in the country with 140,000 registered drivers and over 10 million app downloads. Uber serves close to 30 cities in Brazil, and is present in a total of 12 countries across Central and South America. The U.S. firm aside, 99’s lesser-known domestic rivals include Cabify, which has raised over $150 million from investors like Rakuten, and EasyTaxi, a Brazilian outfit that was previously driven out of Southeast Asia by competition from Uber and Grab. Didi said it will lend “strategic guidance and support” to 99, which includes technical know-how, in much the same way it said it supports its three other investments. On paper unionizing against Uber makes sense, but the anti-Uber alliance hasn’t been plain sailing by any stretch of the imagination. Didi’s relationship with Ola, Lyft and Grab was tested last year — since the deal for Uber China saw Didi align itself with Uber, the arch-enemy of the trio — and it could get interesting if Didi decides to expand its own services overseas, potentially competing with its allies. That’s speculative for now since the Chinese company has kept fairly tight-lipped on its international strategy. But now at least we do know that its global vision includes Latin America, and it may perhaps be extended to other regions, too.