Uber is merging its business in China—UberChina—to market competitor, Didi Chuxing. The Beijing-based company is the major ride-hailing service in China and has made it difficult for foreign services to get a significant foothold there.
According to Bloomberg, the company is now valued at $35 billion. Didi Chuxing will also invest $1 billion into Uber and give the San Francisco-based company a small percentage—5.89-percent—of the merged company. Bloomberg also stated that China has
In a Facebook post, CEO Travis Kalanick discussed the merger and the history of Uber in China. One of the things touched upon was starting from scratch in the market and pouring money into the country while trying to establish a presence.
“Uber entered this uncharted territory in February 2014, two years after Didi was founded,” Kalanick said in the post. “We were a young American business entering a country where most US internet companies had failed to crack the code, and with a product that needed rebuilding. Our China effort has been one of Uber’s most entrepreneurial because we literally had to start from scratch.”
The deal with Didi Chuxing could be seen as the go-to method if things around panning out in a market where there is a major local competitor for Uber such as Ola in India.