Chinese companies Pumps in $1.5billion to create ride-hailing Venture

A new $1.5billion Chinese ride-hailing venture has been formed by companies such as Suning, Tencent, Alibaba, Chongqing Changan Automobile, and few other automobile makers.

The new venture could make an impact on competitor ride- sharing giant Didi Chuxing.

On Friday, Chongqing Changan Automobile announced that it has pumped in $238.36 million in the Nanjing-based investment company. The investment was supported by the investment units of retailer Suning.Com Co Ltd, Tencent and Alibaba, along with automakers FAW and Dongfeng Motor.

According to Bain & Co, consulting firm, China’s ride-hailing market is worth $23 billion and the country is the den to the world’s largest ride-hailing market. 90 percent of the taxi bookings are grabbed by Didi Chuxing.

In a bid to acquire a share of the fast-growing market, carmakers such as BMW, Geely to SAIC and few other tech companies have started their own mobility services.

However, Didi has also joint ventures with Volkswagen and BAIC. The Chinese ride-hailing platform is backed by SoftBank Group Corp.

The largest shareholder in the venture will be Suning (19 percent stake) and the reminder shares will be kept by Alibaba and Tencent’s investment units along with some additional finds.

Changan stated that both FAW and Dongfeng will have 15 percent stake each; which aims to establish a ride-hailing company exclusively based on new energy vehicles.

Apart from Changan’s comments, Alibaba and Tencent did not reveal anything while FAW and Dongfeng confirmed the venture.