Alibaba- Ant Financial partner to invest $400m in Didi Chuxing

A taxi driver is reflected in a side mirror as he uses the Didi Chuxing car-hailing application in Beijing, China, September 22, 2015. REUTERS/Jason Lee

Alibaba Group Holdings Ltd. is partnering with its Internet finance affiliate Ant Financial Services Group, which operates the payments platform Alipay, to invest an additional US$400 million in Didi Chuxing, the Chinese ride-sharing services firm.

In a report from Tencent Technology, it was observed that there was a lack of clarity on whether this transaction was part of a $2.5 billion funding round or a separate investment from the current round that Didi Chuxing is attempting to raise.

Currently, Alibaba hold a 10 per cent equity position in Didi Chuxing after February 2015, following the merger of Didi Dache and competitor Kuaidi Dache to form Didi Kuaidi, which eventually re-branded to Didi Chuxing. The stake is the outcome of a $445 million investment Alibaba made in Kuaidi Dache prior to the merger.

The proposed investment by Alibaba will see a planned capital commitment of $200 million, while its Internet finance arm Ant Financial will invest $200 million, both via subscribing to preferred shares of Didi Chuxing. This investment comes in the wake of Ant Financial securing an investment of $4.5 billion,

The investment by Ant Financial is linked to its planned acquisitions of target firms dealing in domestic IT infrastructure and rural-financial services, as well as international markets. It also follows moves to strengthen and consolidate its position prior to an initial public offering (IPO) on a stock exchange.

Alibaba decided to make the capital commitment, which follows a decision to divest its stake in mobile app-based chauffeured car service provider Ucar Group, following a $461 million in the Didi Chuxing competitor.

Alibaba’s has also made investments in local service O2O (online-to-offline) platform Koubei, in which it has invested RMB 3 billion as of 31 March 2016. Alibaba and Ant Financial each out a 49.6 per cent stake, with the remaining 0.8 per cent owned by an independent food & beverage corporation.

Meanwhile Ele.me has received an aggregate investment of $1.25 billion from Alibaba and Ant Financial. Alibaba and Ant Financial invested $1.25 billion in venture-backed Ele.me, with Alibaba investing US$900 million into Ele.me for a 22 per cent stake.

With the recent Apple investment of $1 billion, the investment by Alibaba and Ant Financial is likely targeted at leveraging on the nature of the billing relationship that ride-sharing apps share with their users, in that financial transactions are a core part of their use and can help to provide insights into consumer behaviour for Ant Financial and Alibaba.

Also Read:

India’s Ola seen gaining from Apple’s $1b injection in strategic investor Didi

Apple invests $1b in China’s ride-hailing major Didi Chuxing

Exclusive: Didi Chuxing is Uber’s toughest competitor and it aims to be last one standing

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.