Chinese ride-hailing service Didi Chuxing is taking over Uber’s local business in a deal valuing the combined company at $35 billion, Bloomberg and Recode report.
Didi is also said to be investing $1 billion in Uber based on a $68 billion overall valuation. Specific terms of the deal aren’t yet clear, though Didi Chuxing was recently valued at $25 billion.
“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” Uber CEO Travis Kalanick was reported as saying in a yet-to-be-published blog post obtained by Bloomberg. “Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.”
Uber has found it extremely hard to grow in China against Didi’s dominance; the Chinese company recently gained worldwide attention after receiving $1 billion in investment from Apple, and later secured more than $7 billion in total.
Today’s deal could be seen as Uber giving up, but its investors will take a stake in the newly merged alliance with Didi, and Uber as a whole will be able to stem the massive losses it’s been suffering in the region. Bloomberg reports the company has lost over $2 billion in China to date.
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