The Chinese ride-hailing app drives into the Middle East
Earlier this year, Didi Chuxing raised $5.5 billion dollars, taking its overall valuation north of $50 billion. The bullish sentiments of investors who are backing this Chinese ride-hailing app are not only because of the mega scale of its business inside China, but because of Didi’s plans for global domination.
This week, Didi Chuxing announced that it had invested in Careem. Although the size of investment hasn’t been declared, this investment will push up the Dubai-headquartered home-grown ride hailing app’s valuation, already pegged at $1billion before the deal, even further up.
This foray of Didi into the Middle East follows several smart inroads it has made into international markets by snapping up shares in ride hailing services around the world including Ola Cabs in India, Lyft in America and 99 in Latin America, among others.
Careem has had an incredibly rapid ascent in the Middle East in the last five years since its inception. It now operates in 80 cities across 13 countries in the MENA and South Asia region. In the last year, it’s raised approximately $500 million in funding and according to a report in Reuters, that included $150million from Saudi Arabia’s Prince Alwaleed bin Talal’s Kingdom Holding.
Didi Chuxing’s investors include Japan’s SoftBank Group, Alibaba and Tencent, among others. As part of the deal struck between Uber and Didi Chuxing last year, Didi purchased Uber’s China business and in return gave Uber a 17.7 per cent stake in its China business – a lucrative proposition when you consider that Didi reportedly has 400 million customers spread across 400 cities in China alone.
At a global level, Didi still has some catching up to do with Uber. Uber reportedly operates in 600 cities across 70 countries and at $68 billion, making it one of the world’s most valuable private companies.
While Uber untangles itself from a crisis in leadership, Didi Chuxing isn’t wasting any time or sparing any effort to knock Uber off its perch.