Date
23 September 2017
Baidu’s investment in Uber gives it a slice of the market in China that has been dominated by start-ups backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Photo: Bloomberg
Baidu’s investment in Uber gives it a slice of the market in China that has been dominated by start-ups backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd. Photo: Bloomberg

Baidu eyeing stake in Uber in US$600 mln deal

Baidu Inc. is buying a minority stake in Uber Technologies Inc., the troubled tax-hailing company that is seeking to expand in China.

The stake will be paid for in cash and non-cash assets including online resources controlled by of China’s biggest internet search engine, Bloomberg reported Friday, citing a person familiar with the deal.

The investment may be worth as much as US$600 million, according to China National Radio.

San Francisco-based Uber this month completed a round of funding that valued the company at US$40 billion.

In recent weeks, however, it has been grappling with regulatory issues including a ban in India after a passenger accused an Uber taxi driver of rape.

This week, Thailand stopped the operation of all app-based taxi service operators who use personal vehicles to serve passengers.

And in Spain, a judge suspended Uber’s operations nationwide after licensed taxi drivers launched protests against the ride-sharing service.

Baidu’s investment gives the search company a slice of the market in China that has been dominated by start-ups backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd., the country’s biggest internet companies.

“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.

An Uber representative this month said the company may raise as much as US$600 million more if other investors decide to come into the most recent funding round at a later point.

Uber, which has raised US$2.5 billion since its inception in 2009, is valued at four times other elite Silicon Valley startups such as Airbnb Inc.

It dwarfs Tesla Motors Inc., which has a market capitalization of about US$26 billion.

General Motors Co., the largest US automaker, has a market value of US$52 billion.

Uber is expanding in China and hiring in 14 cities, according to a July 1 LinkedIn post.

It has been targeting customers 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.

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