Aug 20, 2015 ยท 2 minutes

The international coalition to beat Uber at its own game just got more incestuous. And way more interesting.

As reported previously on Pando, Softbank is essentially bankrolling nearly any major home-turf Asian Uber competitor: The top ones being Didi Kuaidi in China, OlaCabs in India and GrabTaxi in Singapore. But that’s not all. Didi is also backed by Chinese mega-corps Alibaba and Tencent… and Alibaba has also invested in Lyft. Then there’s Coatue who has invested in Lyft, Didi, and GrabTaxi.

It’s like the opening of Soap. It’s an important branch of the coalition of billionaires who didn’t invest in Uber (™), that also includes Andreessen Horowitz, Carl Icahn, Japanese powerhouse Rakuten, and Peter Thiel. [Disclosure: Marc Andreessen and Peter Thiel are investors in Pando]

While there are reportedly no active plans to merge, roll up or in any way formally work together… that’s an awful lot of interconnectedness for one big international group all fighting the same aggressive, win-at-all-costs, take-on-all comers foe.

The battle just got a lot more interesting. Didi has invested in GrabTaxi as part of a $350 million round. Not only is it the first time any of these groups have formally worked together that we’re aware of, but I’m not sure I’ve ever seen another private venture-backed company ever use proceeds from its last funding round to invest in a similar private venture backed company in another market.


There are so many things to like about this as an observer of this battle-royale, and a consumer who doesn’t want a single company-- especially Uber-- to take over all global transportation.

First off: I’ve argued a few times that China is the one place where none of Uber’s normal playbook seems to work, with the exception of paying insanely massive subsidies to get market share. Some familiar with the company say the recent rates that have resulted in such hockey-stick graph growth would lose the company $1 billion on an annual basis if continued. Didi has definitely lost market share as a result, but is still the dominant market leader. They’ve had to step up subsidies to compete.

But Didi has two advantages Uber simply doesn’t have. (Words that are never written about Uber in the US, by the way.) The first is it’s the Chinese company of the two. And anyone who thinks the Chinese government is just going to allow Uber to own the transportation grid of its largest cities-- particularly with its ties to the US state department-- is absolutely delusional.

The second advantage Didi has over Uber is-- again words never written in the US-- cash. Even Uber-- a company that has raised some $7 billion at the highest private valuations we’re seeing in even inflated times-- can’t compete with the pockets of Softbank, Alibaba, and Tencent.

And now, Didi is making that point by investing some of its recent $2 billion round in another Uber competitor.  

The other thing the deal does is send a clear signal to Uber: It’s not only likely all these competitors with shared mega-pocket investors are passing around data and best practices on how to beat you, two of them actually have a formal financial relationship.

Expect more.