Chinese e-commerce behemoth Alibaba is in talks with Indian taxi aggregator Meru Cabs to buy a strategic stake in the Mumbai-based firm. Meru Cabs CEO Siddhartha Pahwa confirmed to Business Standard that his team had held discussions with Alibaba executives. Though Pahwa declined to provide any further details, sources familiar with the talks told Business Standard that Alibaba CEO Jack Ma is expected to visit Mumbai by the end of April.
Alibaba an active player in taxi-hailing service
It will be Jack Ma’s third trip to India in less than five months. Sources said the talks were progressing well. India Value Fund (IVF) will be selling part of its stake in Meru Cabs to let Alibaba check in. IVF owns 80% stake in Meru and recently infused $50 million in the taxi aggregator. Meru is reportedly seeking a valuation of $400 million.
The Hangzhou-based company is already an active player in Chinese taxi aggregation market. Alibaba-backed Kuaidi Dache recently merged with its biggest competitor Didi Dache to form a $6 billion cab-hailing behemoth. Notably, Alibaba is seeking a stake in Meru just a few months after SoftBank invested $210 million in India’s largest taxi-hailing service Olacabs. SoftBank holds a 33% stake in Alibaba.
Alibaba’s third stake purchase in the Indian market?
Meru is looking to raise about $100 million to fuel its inorganic growth as it faces still competition from Olacabs and Uber. The company is looking to expand its presence to 40 cities by the end of this year. Interestingly, Alibaba-Meru talks have surfaced just weeks after the Chinese company’s talks with Snapdeal failed.
Alibaba was reportedly keen to inject $1 billion in the Indian e-commerce firm Snapdeal at a valuation of $4-$5 billion. But the deal didn’t go through as Snapdeal was seeking a valuation between $6-$7 billion. In January, Alibaba’s finance arm Ant Financial, which operates Alipay, acquired a 25% stake in India’s One97 Communications, which owns and operates the mobile commerce platform Paytm.
Alibaba shares fell 0.56% to $81.83 at 11:14 AM EDT on Monday.