Baidu continues push into ride-sharing with investments in Tiantian and 51 Yongche
Search giant Baidu has continued its high-speed expansion into China's ride-sharing market, with two key investments in budding startups as it tries to catch up with powerful rivals backed by Alibaba and Tencent.
In the past week, the company has announced investments in carpooling and ride-sharing apps Tiantian Yongche and 51 Yongche, hoping to threaten market-leading Kuaidi Dache and Didi Dache.
Ride-sharing apps let users heading in the same direction share a vehicle for a set fee. Such services are promoted as a way to better utilize the empty seats in most passenger cars, thus lowering fuel usage and transport costs. They are a popular alternative to taxi-hailing apps, such as Did and Kuaidi, which let users book taxis or private cars on their mobile devices.
Tiantian Yongche announced on Sunday that it had raised an undisclosed amount in a Series C funding round which included Sequoia Capital. Boutique investment bank China Renaissance said it acted as an exclusive financial advisor for the deal.
Early stage venture capital fund Innovation Works also took part in the round, according to news portal QQ Tech, which said Tiantian Yongche’s valuation was close to US$200 million, without specifying where it got the information.
The funding would help the company, which focuses on taking people to and from work, build a stronger team and expand the app into more cities, so that users would “not only use the app where they live, but also on business trips or during travels”, the bank said in a statement.
On Friday, 51 Yongche said it had raised “tens of millions” of US dollars in a funding round which also included Sequoia.
The two Baidu-backed companies face a tough challenge in mainland China's competitive transport app market. Taxi-hailing apps Kuaidi Dache and Didi Dache, who announced a merger earlier this year, control almost 90 per cent of that market segment.
But Zhou Liang, a director of China Renaissance, said he was confident that Tiantian Yonche, whch had completed three rounds of fundings in six months, would become a strong company that embraced the sharing economy.
“As mobile internet drastically reduces the costs in the exchange of information, the sharing economy gets a catalyst for rapid growth,” he said.
Tiantian Yongche now operates in Beijing, Shanghai, Guangzhou, Hangzhou, Tianjin, Chengdu and some other smaller cities, and it aims to increase the number of cities covered to 60 this year.
Baidu apparently has a multi-pronged vision for the ride-sharing market, as it has also made an investment in San Francisco-based Uber late last year, though the amount of the investment was not disclosed.
The search engine operator also recently entered the used car market by investing in Uxin, the mainland’s largest marketplace for used cars that raised US$170 million from a group of investors led by Baidu.