Chinese search engine giant Baidu has invested in yet another taxi-hailing service. Tiantian Yongche announced Sunday that it had raised an undisclosed amount in Series C funding round led by Baidu and Sequoia Capital. According to QQ Tech, the deal values Tiantian Yongche at close to $200 million.
Baidu invests in two carpooling apps
The Beijing-based search company was left out after Alibaba-backed Kuaidi Dache and Tencent-backed Didi Dache announced $6 billion merger to form China’s largest taxi aggregator firm. These two firms control almost 90% of the country’s carpooling market. In November last year, Baidu had invested about $600 million in the U.S.-based Uber to help it expand its presence in China.
Baidu’s investment in Tiantian Yongche came just a couple of days after the company led an investment into another carpooling app 51Yongche. Without disclosing the exact amount, 51Yongche said that it raised “tens of millions of dollars” from a group of investors led by Baidu and Sequoia Capital. Baidu had reportedly also invested in Yidao Yongche. Uber and Yidao Yongche are currently exploring a potential merger.
But all the Baidu-backed firms, except Uber, are pretty small in China’s crowded taxi-hailing service market, which is dominated by Kuaidi Dache and Didi Dache. Tiantian Yongche operates in about a dozen cities, and 51yongche covers just four cities. By comparison, Kuaidi Dache has a solid presence in 306 cities across China. Its merger with Didi Dache will further strengthen its business.
Baidu investing in competing firms
Baidu’s investment in a wide range of competitors in the same business suggests that the company might be hedging its bets, reports Tech in Asia. Or the company may consolidate all these investments into a single player that can rival the combined force of Kauidi Dache and Didi Dache.
Last month, Baidu also entered the used car market by investing in Uxin, China’s largest marketplace for used cars. Uxin raised $170 million from a group of investors led by Baidu to expand its B2C platform.
Baidu shares jumped 1.34% to $217.66 at 12:33 PM EDT on Monday.