China’s homegrown ride-hail player Didi has invested in Brazil’s ride-hail service 99 (formerly 99Taxis), the companies announced on Wednesday. As part of the more than $100 million round of which Didi is the lead investor, a Didi executive will join 99’s board of directors.
As Recode reported, Peter Fernandez — an angel investor in the company who later joined 99 as chief product officer and is now the CEO — had been speaking to some of the founders of the four global ride-hail companies that forged a knowledge-sharing partnership as early as April 2016.
The companies didn’t disclose how much Didi specifically had invested or at what ownership stake.
That global partnership — which I first reported the discussions of in 2015 — includes Didi, India’s Ola, Lyft and Southeast Asia’s Grab, and was formalized when Didi invested in each of the companies. It’s not yet clear whether Didi’s investment in 99 indicates the Brazilian ride-hail player is part of the larger alliance just yet.
The investment comes as Uber’s hold on the ride-hail market in Latin America grows stronger. As of August 2015, Mexico was Uber’s third-largest country market and Brazil was its fastest growing in Latin America.
However, Fernandez previously told Recode that it didn’t plan to expand outside of Brazil just yet.
“Brazil is a must-win market in the world,” he said in April. “It has the world’s fifth-largest population. From my perspective, it’s a much more important priority for the company to win in Brazil than it is to peanut-butter our operations across the region.”
But the country is also in what Fernandez described as the worst economic recession it’s seen in decades. That’s why 99 — which only recently launched a peer-to-peer service and primarily operates an on-demand taxi service since it’s completely legal across the country — rolled out a discounted service just in time for the Olympics.
During times of low demand, drivers are given the option to turn on this feature and automatically take 20 percent off of each fare. So whenever a passenger opens the app, if there is a driver in discount mode close to them, they will be automatically matched with that driver. Since 99 charges a standard fee to all drivers, Fernandez contends this discounted price won’t affect the long-term sustainability of the company.
The investment also comes months after Uber sold its China operations to Didi — a move many of its international competitors took to mean Uber might refocus its efforts and its newfound resources on its other important regions.
There hasn’t been much to show for the international anti-Uber partnership that Didi had a big hand in forging aside from a cross-booking feature Lyft launched with Grab and Didi. But since Didi acquired Uber China in August, the strength of the international network of ride-hail players that shared resources has fractured.
At the time of Didi’s acquisition of Uber China, Lyft said they were reevaluating their partnership with the company. As for Ola, since Didi made such a small investment in the company, a source close to Ola said little changed in the company’s day-to-day affairs. But sources tell Recode that although Didi isn’t competing against Uber in China anymore, it plans to continue to do so through its investments in players in other regions.