Mubadala along for the ride with Didi
▶ Investment in China’s transport platform makes perfect sense
Last week, a company unknown to most people outside China overtook Facebook to become the fifth-largest company in the world.
The market capitalisation for Tencent, the social media and videogame juggernaut behind the revolutionary WeChat app, surged past the US$500 billion mark after posting a record set of quarterly results. In doing so it overtook Facebook’s market capitalisation (albeit briefly), prompting headlines across the West.
The ride-hailing service Didi Chuxing is similarly making a mark outside its home market of China; not only is it the largest service provider of its kind in both China and the world, but it also has begun to spread its wings beyond its home market.
The company has investments in every region in the world, including stakes in fellow ride-sharing companies Uber and Lyft, giving it a footprint in cities that cover 60 per cent of the world’s population.
In August, the company entered the Middle East, with an undisclosed investment in Careem, based in Dubai. But the Middle East has also entered into Didi. Mubadala Investment Company, Abu Dhabi’s strategic company, holds a
Didi is the largest service provider of its kind in both China and the world, and is spreading its wings beyond its home market
shareholding in the company alongside Apple and Japan’s SoftBank Group. Mubadala participated in Didi’s latest $5bn funding round in July, meaning the company is in no rush to follow compatriots Alibaba and Tencent to list its shares.
Didi’s partnerships with Mubadala and Careem make a lot of sense for all parties. The deal with Careem gives the Chinese firm access to the fast-growing markets of the Middle East, where ride-sharing apps are revolutionising public transportation.
Careem in turn gains access to Didi’s deep expertise in areas such as artificial intelligence and international experience, as Careem seeks to develop its product and further expand its geographic reach.
Mubadala’s investment, meanwhile, perfectly fits in with the company’s longstanding tech investment strategy, in which it has committed $15bn to SoftBank’s high-profile VisionFund and opened a venture capital arm in San Francisco.
Its investment in Didi gives it an interest in one of China’s fastest-growing and most dynamic companies, neatly dovetailing with Abu Dhabi’s economic diversification strategy.