Chinese ride-sharing service provider Didi Chuxing is investing millions of dollars in its Brazilian rival 99, posing the greatest threat to Uber’s growing dominance in South America’s biggest country.
Neither company has disclosed the precise amount of money being invested, but Brazilian papers have noted the figure is around the $100 million mark.
With 140,000 registered taxi drivers and 10 million users, 99 operates in 550 cities in Brazil.
Uber, whose operations in countries like Costa Rica ran into trouble, had just begun focusing on expanding in Latin America, after it sold off its Chinese operation to Didi in 2016 after years of intense competition in the Asian country.
Uber has been operating in Brazil since 2014, and Sao Paulo is reportedly its second biggest market in the region after Mexico City.
In Brazil, Easy and Cabify are 99’s other rivals, in addition to Uber. After Uber started operations in Sao Paulo, most of the ride-sharing providers reduced their travel fares. The Chinese investment is likely to push the fare further downwards.
Didi is not only pouring money into 99, but it is also outfitting the Brazilian firm with cutting-edge technology.
“Didi’s financing, state-of-art technology, and operations knowledge will play a key supporting role as 99 actively expands our network and services in Brazil and reshapes the competitive landscape in Latin America,” the Brazilian firm stated in a press release.
Founded in 2012, Didi Chuxing is the third most valuable startup in the world, according to Forbes. From Baidu to Alibaba to Apple, the Chinese startup has the backing of several internet companies from around the world.
Some analysts say Didi may be looking for more investment opportunities in Latin America.