China-headquartered ride hailing service Didi Chuxing has entered discussions to acquire a majority stake in Brazil-based counterpart and portfolio company 99, The Information reported yesterday, citing a person familiar with the talks.
Initially known as 99Taxi, 99 runs an on-demand ride platform that has a share of the Brazilian market sized at about 20%, Didi Chuxing employees told The Information, though US-based Uber remains market leader in the country.
Didi Chxuing led a $100m+ round for 99 in January this year that was followed in May by a $100m investment from telecommunications and internet group SoftBank, itself an investor in Didi Chuxing.
The China-based corporate has transferred some managers to 99 since it invested in order to help it expand into new markets in Brazil, according to The Information. It reportedly views the country as a test market that could indicate how effective its domestic tactics can be elsewhere.
The news comes a day after Didi Chuxing closed a $4bn funding round featuring SoftBank and Mubadala Investment Company. It is preparing to enter Taiwan in a move that will represent its first direct move into a different country.
Didi Chuxing holds stakes in US-based Lyft, India-based Ola, Singapore-based Grab, Estonia-based Taxify and United Arab Emirates-based Careem as well as 99.
SoftBank is also an investor in several of those companies, but the proposed deal is the first sign Didi Chuxing may choose to use those partnerships as a base for direct international expansion.
Prior to 2017, 99 had raised an undisclosed amount from mobile semiconductor producer Qualcomm and VC firm Monashees in 2013, before Qualcomm unit Qualcomm Ventures and Monashees joined Tiger Global Management to add $25m in funding in 2015.