After a long fought battle between Uber Technologies Inc. (China division) and Didi Chuxing it has come to a dramatic end. While China being highly competitive and growing market for Cab hailing apps it looks like both UBER and DIDI have decided to join hands. Recently the news came in that world most valued start up is selling its china’s local business to DIDI Chuxing.
“Uber China’s value will represent a 20% stake in the combined entity with Uber being Didi’s largest shareholder.” Uber CEO Travis Kalanick said in a blog post. He added “Being successful as an entrepreneur is listening to your brain as well as your heart”.
The deal is not only one sided as The Wall Street Journal reports that DIDI has invested $1 billion in Uber at $68 billion valuation.
Uber in China operates in 60 cities with around 40 million rides per week whereas Didi Chuxing operates in 400 cities and gets around 11 million rides daily as stated in the first quarter. Uber entered in China two years after Didi Chuxing Technology Co. was founded. As it is the situation with any company whose market is nascent goes without saying for both of them. Uber and Didi both have burned a whole lot of investors’ money to tap into the china’s market share. This fight has cost Uber around $2 billion dollar in Chinese market.
Both the companies have a long list of big investors in their bag. Recently Uber has raised $3 billion while Didi Chuxing managed to get $7 billion in its investments that includes Apples 1 billion too.
While this may have ended the rivalry between the two in Chinese markets but Uber which is facing stiff competition from Ola in India is also changed as Didi has recently invested $500 million in Ola.
Whatever happens in this sector one thing is sure to change that is users way of transportation.