New Delhi: Didi Chuxing’s acquisition of Uber’s China business last week reshapes the landscape in Asia’s growing ride-hailing sector, and leaves India’s Ola more vulnerable to attack by Uber in its $12 billion home market.
Four months ago, Ola executives met with Didi hoping the Chinese firm would invest fresh capital to help it fight Uber Technologies Inc which, with its deeper pockets, has made rapid inroads into India.
They were told Didi wanted first to sort out its own challenges in China, said a person with direct knowledge of Ola’s plans. Didi and Uber have raised and spent billions of dollars in a discount slugfest to win drivers, passengers and market share in China.
Didi, now worth around $35 billion, last year invested about $30 million in Ola, which is also backed by Japan’s SoftBank Group, and the two are allies in an anti-Uber group that also includes U.S.-based Lyft and Southeast Asia-focused Grab.
“This (Didi/Uber China) deal changes the dynamics of how they (Didi) will invest in India,” said the person, who didn’t want to be named because the discussions were private. If Didi invests more in Ola, it’s effectively betting against Uber, its new partner in China, the person said.