Dubai's Careem Acquires Hyderabad-based Transportation App Commut

Dubai, UAE-based ride-hailing app Careem has acquired Commut, a Hyderabad-based mass transportation app, marking its entry into India, announced the company on Monday.

Careem did not disclose the size of the deal, which it said would accelerate Careem's expansion into mass transportation through the addition of bus services across the 100 cities it operates in.

Post acquisition, Commut’s talent and technology will be taken by Careem while Commut's local operations – including its customers and driver-partners – will be taken over by Shuttl, a shuttle service provider based out of Gurgaon, India. This is part of Shuttl's deal with Careem, when the Gurgaon-based firm had raised US$11 million in a series B round led by Amazon and Dentsu Ventures in July.

Backed by Chinas Didi Chuxing, Careem is itself reported to be the subject of a potential takeover bid by US ride-hailing giant Uber in a deal that could value it at $2 billion or more.

Founded in 2015, by six IIIT Hyderabad graduates, Commut has been funded by UK-Based Shell-Foundation and 50K Ventures and its bus shuttle service has been operating in Hyderabad since November 2015. To date, they’ve made over 750,000 trips within more than 100 existing routes and are the third-largest transportation app in India. The six co-founders of Commut are -- Charan Thota, Hemanth Reddy Jonnalagadda, Prasanth Garapati, Sandeep Kachavarapu and Srujai Varikuti.

Prasanth Garapati, CEO of Commut, said: “We built Commut with the mission to touch and improve people’s lives by offering an economical, comfortable, safe and tech-enabled mass transit solution. Our mission is in line with Careem’s of providing users with a safe, reliable, affordable and convenient means of transportation for people. Joining Careem and building the mass transportation vertical will help us in fulfilling our mission at a much larger scale”.

To recall, Careeem had also acquired Savaree, a Lahore,Pakistan-based cab service startup, in March 2016

China’s Didi Chuxing to Invest in India's Oyo Rooms at Valuation of $2 Billion; Softbank May Join In

In June this year, OYO rooms has forayed into China and it appears that it has started showing benefits or better call a jackpot for the Indian hospitality startups, China’s Didi Chuxing has shown an interest to invest in Oyo, reported Economic Times, today.

The funds, however, will be invested into OYO's Chinese unit and not the Indian one, said the report, which also means that the Gurgaon-based startup will split operations of the budget hotel network into two -- India and China operations. OYO is reportedly looking to raise funds to the extent of $1.1 billion in this fresh round of which around $500 million would go to OYO China and the rest to OYO Global which includes the Indian side of the business.

OYO, which recorded a gross booking value of $500-600 million, expanded into 26 Chinese cities, making it the third overseas market for the company after Malaysia and Nepal.

If the deal goes through, it will Didi Chuxing's second bet in India after it invested in ride-hailing startup Ola. It is to be noted that, Didi is Uber rival in China and.

If the proposed funds are raised, OYO could get valuation of about $4.5 billion, as per reports. Earlier in July, it was reported that OYO is close to raise fresh funding of about $300-500 million from Chinese internet giant Tencent, which could value OYO at $2 billion.

On the China side a big chunk may be taken by the popular hail-ride firm Didi Chuxing and WeWork, a startup that deals with shared office space in China. The two Chinese firms may have limitations in making investments only within China and therefore this split-up has been necessitated. A 100% subsidiary will now stand diluted to 50% to accommodate this arrangement.

The report also said that OYO's largest investor, so far, Japan's SoftBank is bringing in its funds too to keep its proportion of holding at almost the same levels as earlier, which is around 40-42%. It is being explained that SoftBank has a limitation that if its holding goes above 50%, then it has to buyout the rest of the stakeholders. Besides SoftBank, there are other investors like Sequoia Capital and Lightspeed Venture Partners who will also be willing to take appropriate positions in OYO’s China operations.

Coming to OYO’s operations in China, OYO has signed up around 1000 properties in many Chinese cities in the tier 2 3 & 4 levels where the average room rent charged per night is around $20-25. The potential to grow further and to expand to higher segments like the branded hotels is also seen to be quite bright.

[Top Image - Hotels.com]

China's Uber Rival Didi Chuxing Gets $600M Strategic Investment From China Life

China's Uber rival, Didi Chuxing, a car-hailing app has received an investment of about $600 million from China Life Insurance Co Ltd. Earlier this month, Uber raised $3.5 billion from Saudi Arabia's sovereign wealth fund in new resources earlier this month.

The investment by China Life - included equity of $300 million and a long-term borrowing commitment of $305 million.

"The two parties will also collaborate on investment opportunities in mobile transportation and related sectors in China and beyond," the companies said in a statement.

Apple Inc also invested $1 billion in May in the Uber rival, a move that Apple Chief Executive Tim Cook said would help his company better understand the critical Chinese market. In May this year, Alibaba Group Holdings Ltd. was also planning to team up with affiliate Ant Financial to invest an additional $400 million in Didi Chuxing.

Prior to the China Life investment, the company had raised about $6.3 billion including funding rounds before and after it became a merged company, as per research firm CB Insights. In May, Didi which completes more than 11 million rides a day, was working towards in initial public offering in the United States that would likely take place in 2018.

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