Earlier today we reported that Didi was in the process of obtaining 99, a ridesharing company in Brazil, and now both companies have confirmed the bargain as part of Didi’s plans to expand its service into Latin America.
Details of the deal were not disclosed — we’re asking — but earlier now we noticed that Didi was efficiently placing in $900 million — $600 million to buy out investors, and an extra $300 million of further investment to the business and its expansion plans — effectively giving the company a valuation of $1 billion (after you add in Didi’s initial $100 million investment in 99 at January of last year).
The deal gives Didi — through its partnerships with different companies like Grab and Lyft, franchises like in Taiwan, and through its direct ownership of providers in China — coverage at 1,000 cities, reaching over 60 percent of the world’s inhabitants. It says it currently has 450 million consumers of the Didi app.
“The achievement that founders and group of 99 have attained in Brazil embody the very spirit of innovation and entrepreneurship in the LatAm area,” said Chen Wei, Founder and CEO of DiDi, in a declaration. “Building on the deep trust between both teams, this new degree of integration will bring to the area more suitable, value-added mobility services.
“Globalization is a top strategic priority for DiDi. With enhanced investments in AI capacities and smart transportation solutions, we will continue to progress the transformation of global transportation and automotive businesses through diversified international partnerships and operations,” he included.
“We feel privileged to be now one organization with a much more powerful goal: enhance the transportation business and massively affect the lives of billions of people worldwide,” said Peter Fernandez, CEO of 99, in a declaration. “We’re convinced that being part of Didi Chuxing will significantly enhance our capability to expand our services across Brazil to bring critical value to customers, cities and drivers. ”
This is a considerable move also because up to now, Didi has primarily been concentrated on accepting investments in regional leaders instead of acquiring them outright. Its last major acquisition was purchasing Uber in China in 2016, to help consolidate its leadership in that industry and wipe out a few of the enormous (and expensive) effort of competing with Uber.
The company is reportedly also now seeking to move deeper into bicycle sharing, allegedly also just today purchasing a bike-sharing startup in China, Bluegogo. It also invested in another bicycle startup, Ofo.
We’ll update this story as we know more.