This is a business story that would probably stand the test of time. This was a battle between a pugnacious player which has always relished battles and has a penchant for taking it all the way to the opponent’s backyard . But only this time, it faced a different kind of animal called China, which is a different planet altogether when it comes to receiving outsiders. To add to it, the opponent was another unicorn operating in the most consumerist as well as protected global economy.
But for pugilists like Uber’s CEO Travis Kalanick, who thrives under such conditions, the world’s most lucrative consumerist market had to be conquered at any costs. To get an idea of what was at stake, consider for a moment that Uber is valued higher than GM, Ford, and Honda. Uber tried to do what any global MNC, leave alone American tech giants, could not do till date in China.
“You’re not going to find a country with 80-plus cities with over five million people anywhere else,” Uber co-founder Kalanick said.
In July 2014, Kalanick had met with Didi executives with an investment offer, which was turned down. “You are earlier than us, but there will be a day when we will surpass you,” said Cheng Wei, co-founder and CEO of Didi Chuxing in a WSJ feature.
Two years later, Uber had barely managed to capture a 20% market share, after burning about $2 Billion.
On the flip side, the merger did give Uber an 17.7% stake, making it the largest shareholder in Didi Chuxing. As Uber now trains its guns on other global markets including India and challenges, here’s a look at the key moments that created a global transportation giant, now valued at $36 billion.
The following video provides a blow-by-blow account of how the fiercest unicorn startup war played out, until it ended in a truce a month ago. We’ve woven turning points for all the three ride sharing giants — crucial funding rounds, regulatory hurdles, and metrics shared by the two companies that show why Uber surrendered rather than fight a prolonged war that cost it a billion dollars a year.
Seven Key Pivotal Moments that Changed the Tide in the Billion Dollar Battle
April 2013 – Didi Gets Tencent Backing
With a market cap of over $256 Billion, Tencent is now Asia’s most valuable company, with over 40 acquisitions to its name. Tencent’s empire extends to advertising and gaming, its messaging applications WeChat and QQ boasts over a billion users collectively. Tencent stands taller than other Chinese heavyweights Alibaba, and Baidu, and having someone like that on your ring side gave Didi the much needed firepower to prepare for an all out war against the most funded externally startup in history. The partnership also helped Did leverage Tencent’s WeChat app ecosystem, which could be used to book a Didi taxi even as Uber was unceremoniously blocked.
July 2014 – Didi’s Chung Wei Rejects Offer for Investment From Travis Kalanick
Before things turned no-holds-barred between the two ride-hailing giants, Uber CEO Travis Kalanick’s offer to invest in Didi was famously turned down by co-founder and CEO Chung Wei. “You are earlier than us” globally, he says he told the UberCEO, “but there will be a day when we will surpass you.” As it turned out, Uber managed to capture only a 20% marketshare at the time of the merger.
December 2014 – Uber Bags Investment From Baidu
Baidu, part of the internet giants troika of China, backed Uber China, and provided an option to book an Uber through the Baidu Maps smartphone app. The taxi-hailing market was now split into a three way fight, with Alibaba, Tencent and Baidu, each backing their own horse in the race.
Feb 2015 – Didi and Kuaidi Merge to Create $6B Entity
The merger of Didi Dache and Kuaidi Dache, into what would eventually become Didi Chuxing created the single largest player in the world’s largest transport market, and put an unassailable distance between its American competitor.
Dec 2015 – Didi Creates a Global Anti-Uber Alliance
Following Didi’s investments in Lyft, Ola and GrabTaxi, the four companies ink a strategic global anti-Uber partnership. The alliance was significant as it rallied all the competitors against Uber, leaving but only one exit option for the American ride-hailing startup, while limiting the options for its local competitors.
Jan 2016 – Didi Comprehensively Beats Uber in Terms of Number of Rides
Uber marked its one billionth trip since inception in December 2015, but the celebrations were short lived — Didi Kuaidi surpassed the milestone by booking 1.43 billion rides in 2015, clocking over 200 million rides in just a month. That single metric showed the world who’s the top dog.