Didi Chuxing has quite a few plans going on. The Chinese ride-hailing firm secured an investment of $500 million from online travel company Booking Holdings (BKNG). This deal is less about money and more about strategic benefits. Didi and Booking will work together to help the customers of both companies avail ride services and book hotels through the travel company’s website and apps.
Partnerships between travel companies and ride-hailing services have good value and come with a lot of benefits as they are both closely linked and can help in increasing the convenience of the customer immensely leading to revenue increases and growth in business.
Didi, which raised $4 billion in a financing round last year, has enough money in its pockets right now and the company is expanding internationally at a rapid pace. Booking Holdings has a strong business with several subsidiaries and can prove to be a right partner for Didi in its growth plans.
Didi Chuxing to spin off car services unit
Didi is also planning the spin-off of its car services unit and is looking to generate $1 billion to $1.5 billion from the deal. The unit is valued at $2 billion to $3 billion right now. The car services unit, which includes sales, rental, maintenance and gas service operations, is an asset-heavy business. Didi is said to be planning an IPO in the near future, and this is reportedly one of the reasons behind the spin-off decision.
Offloading an asset-heavy business like the car services one could give Didi the flexibility needed to go ahead with its IPO plans. The ride-service company was valued at $56 billion at its financing round in 2017, and its IPO is anticipated to be huge for this reason.
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