BEIJING (AFP) - Two popular taxi-booking apps backed by Chinese tech behemoths Alibaba and Tencent announced on Saturday they would merge to create a new company reportedly valued at US$6 billion (S$8.12 billion).
Kuaidi Dache - part-owned by Alibaba - and Didi Dache - backed by Tencent - together control 99 per cent of China's domestic market for booking taxis by smartphone, with apps developed along similar lines to San Francisco-based Uber.
The new group will be jointly overseen by both companies' current management teams, and will maintain separate products and branding, they said in a statement. Financial details were not disclosed.
The apps, both launched in 2012, allow users to book and pay for a taxi by smartphone using geolocalisation software. The new entity could be worth more than US$6 billion, according to sources cited by Bloomberg News, and represents a rare instance of cooperation in the fierce rivalry between their backers.
Investment in taxi- and car-booking apps has become a proxy war among China's Internet giants.
Kuaidi Dache raised US$600 million for expansion in January, with heavyweight investors including Japan's SoftBank and investment firm Tiger Global Management, as well as Alibaba.
Tencent, operator of the popular messaging app WeChat, has invested heavily in Didi Dache.
In December the research firm Analysys estimated Kuaidi Dache controlled 56.5 per cent of a market containing hundreds of millions of users, while Didi Dache claimed 43.3 per cent.
The announcement comes as Uber seeks to crack the current duopoly in China, after receiving significant financial backing of an undisclosed amount in December from Baidu, a Chinese internet search giant.