China Life plays both sides with USD 600 million investment in Didi Chuxing

By on June 13, 2016 | News

Soon after the announcement of a huge investment round by the ride hailing giant Uber, Didi announced that they are looking at a round of investment that will top Uber’s recent investment. Apple recently invested USD 1 billion in the Chinese ride hailing company to strengthen its position in China and dig deeper into the automobile space. It could also be a great way for Apple to give push to its payment services. Now news reports suggest that Didi Chuxing has received another USD 605 million investment from China Life Insurance to further fuel the battle with Uber.

didi chuxing

China Life is a 70 percent state owned company and is the largest life insurer in China. It is ranked at 94 in the Fortune 2015 Global 500 company list. The investment includes equity of USD 300 million and long term borrowing commitment of USD 305 million according to a statement. The statement also highlights that the two parties will also collaborate on investment opportunities in mobile transportation in China and beyond. This could mean that the two companies will be looking at supporting Didi’s international anti-Uber partners like Ola, Grab and Lyft.

However, China Life is also an investor in Uber and that too in the China operations of Uber. China Life isn’t the only investor placing bets on both the major players in China. Hillhouse Capital Group invested in Didi in the early days and is also an investor in the global operations of Uber. Tiger Global Management is another such investor. Tiger Global is not only playing both sides in the Didi and Uber episode but is also a major investor in GrabTaxi and Ola Cabs. The news of investment in Uber by Tiger Global wasn’t received well by other investors in Ola as one investor playing both sides in the battle puts other investors at a disadvantage.

It seems that with the potential ride hailing app companies have, investors are ignoring the unwritten rule of venture capital. No matter how things play out, they will be on the winning side, one way or the other.

Expect more investment news to come from Didi as the brand tries to top the USD 5 billion round raised by Uber. How this will play out in the long run is anybody’s guess.

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