China's leading online taxi hailing service provider Didi Dache has secured $100 million in Series C funding from Tencent and Citic.
The Beijing-based company's investment is led by Citic with $60 million, and Tencent, the world's fourth largest internet company has invested $30 million.
In May 2013, Tencent also invested $15 million in Didi.
Officials have yet to say if the Didi app will be integrated with Tencent's popular online messaging app WeChat (with 270 million monthly active users) for easy processing of payments. However, Didi Dache service is already integrated with Tencent Maps and Baidu Maps.
Didi's competitors include Kuaidadi, Yongche, and Yaoyao Zhaoche. Didi Dache is one among the four apps that Beijing traffic authorities officially approved.
Recent investments in China online car rental
Yongche received $60 million in Series C funding from China's leading OTA Ctrip, and DCM.
Hangzhou-based Kuaidadi raised $100 million investment led by Alibaba, and the company acquired Shanghai-based taxi hailing service Dahuangfeng. Kuaidadi users can also pay for their taxis using Alibaba's payment service Alipay.
eHi, a Shanghai-based online car rental service secured over $100 million investment from Ctrip and existing investors.
Despite the big investment waves in online car rental market in China, only 7% of car rental bookings were made online in 2012, and it is expected to increase to 13% by 2015. According to PhoCusWright, the car rental market will still be less than 1% of the China online travel market in 2015 where the majority share will be grabbed by air and hotels.
The car rental market has turned very competitive with both local and global players (UBER entering China) and other related services like P2P car sharing.
UPDATE
Q&A with Louis Li, Director of Strategy at Didi Dache:
How will this funding amount be used?
To improve user experience.
With Tencent as an investment company, will Didi app be integrated with WeChat?
Yes, with this month.
Can you elaborate on your taxi driver subsidiary policy?
It varies over cities and time. Basically, we encourage driver to pick up order (accept requests) in remote areas and peak hours.
Online car rental market is very hot in China with Ctrip, Alibaba and others investing many millions. Is this industry up for consolidation or saturation? What's your view on this and how Didi Taxi is going to thrive?
The market is big enough to have multiple players, and we compete each other with quality and reliability of service, not just in marketing or size of investment. We will continue to focus on improving user experience.
Is Didi Taxi the biggest online taxi hailing company in China?
Yes, we are.
How many bookings you are serving in a day?
300,000 bookings per day in China.
However, Li didn't comment when asked about the strategies in place to beat competitors like Kuaidi Taxi, and Kuaidi's announcement to invest RMB 100 million to subsidize drivers.