China’s Didi Chuxing acquires control of Brazilian ride-hailing app 99 for US$1 billion
Investors bought out by Didi include Riverwood Capital, Qualcomm Ventures and Softbank Group
Chinese ride-hailing app Didi Chuxing has agreed to acquire control of Brazil’s 99, the companies said on Wednesday, potentially creating a rival to Uber in Latin America’s largest economy.
The companies neither disclosed the stake acquired nor its value, but an earlier report by Brazilian newspaper Valor Econômico on Wednesday said the deal valued 99 at US$1 billion.
According to the paper, which cited sources familiar with talks, the Chinese company bought out investors such as Riverwood Capital, Monashees, Qualcomm Ventures, Tiger Global Management and Softbank Group.
The acquisition intensifies Didi’s global rivalry with Uber, especially in Latin America. Reuters reported in December that Didi planned to enter Mexico this year.
Cheng Wei, 34, founder and chief executive of Didi, said on Wednesday that “globalisation is a top strategic priority for Didi”.
Didi first invested US$100 million in 99 in January 2017, getting a stake and management rights in the Brazilian app.
One source with knowledge of the matter said the funds selling their stakes in 99 started looking for a buyer several months ago, in mid-2017.
Riverwood, Monashees, Tiger Global and Soft Bank Group did not reply to requests for comment.
Didi has made no secret of its desire to expand beyond China, particularly in light of the growing number of Chinese customers who travel overseas.
In December, Didi raised US$4 billion from investors, in part to fund global expansion, following on from a US$5.5 billion fundraising in April.
Didi, the world’s biggest ride-hailing company, has a history of battling Uber, forcing it to pull out of China. And when asked recently about competition from Meituan-Dianping, which has advertised its plans to expand into ride-hailing in several Chinese cities, Cheng quoted the 12th-century Mongolian warrior-ruler Genghis Khan: “If you want war, you will get war.”
Didi, which can count tech giants such as Apple, Alibaba Group Holding and Tencent Holdings among its biggest shareholders, was itself born from a truce between two ride-hailing companies that had engaged in a ruinous price war, which at one point went as far as giving consumers free rides to win market share.