Investment in US taxi-booking app could be worth $600m
Baidu Inc, the owner of China's biggest Internet search engine, is buying a minority stake in Uber Technologies Inc, the taxi-booking company which is expanding into China, according to a person familiar with the matter.
Uber will receive cash and non-cash assets, including access to Baidu's online resources, the source said, for an investment likely to be worth as much as $600 million, China National Radio reported earlier.
The investment will give the search giant a slice of the market in China that has been dominated by startups backed by Alibaba Group Holding Ltd and Tencent Holdings Ltd, the nation's biggest Internet companies.
San Francisco-based Uber this month completed a round of funding that valued the operation at $40 billion.
"Uber needs a local player like Baidu that really understands the Chinese market," said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong.
"Baidu is trying to promote its mobile payment system and Uber would help it gain more traffic and boost its location-based services."
Kaiser Kuo, a Beijing-based spokesman for Baidu, confirmed only that Baidu is expected to make an announcement next Wednesday about an investment with a US startup that is now a household name, but declined to offer any further details.
Evelyn Tay, a spokeswoman for Uber, did not respond to a phone call and two e-mails seeking comment.
An Uber representative this month said the company may raise as much as $600 million more if other investors decide to come into the most recent funding round at a later point.
Uber, which has raised $2.5 billion since its inception in 2009, is facing an increasing number of regulatory and legal hurdles with its app in markets such as India, and California in the United States.
The car-booking app is now valued at four times that of other elite Silicon Valley startups, such as Airbnb Inc.
Uber's value also dwarfs Tesla Motors Inc, which has a market capitalization of about $26 billion. General Motors Co, the largest US automaker, has a market value of $52 billion.
Uber is expanding in China and now hiring staff in 14 cities, according to a July 1 LinkedIn post. Uber has been targeting customers who are willing to pay a premium for the luxury of tracking the vehicle's approach, not handling local cash and finding daily newspapers and a Wi-Fi access inside the car.
Posted on 13-Dec-2014