In China, streaming video site buys big stake in Uber competitor

Letv, a Chinese tech company known for everything from smartphones to streaming video, today announced plans to delve into the car hailing business.

The investment wing of Letv is aiming to acquire 70 percent of Yidao Yongche, a car rental and ride-hailing startup that’s a minor competitor to Uber and Didi Kuaidi. According to some Chinese sources, the total investment is rumored to be US$700 million, which would value Yongche at US$1 billion – a relatively small amount compared to the multiple billions and tens of billions that Didi Kuaidi and Uber are valued at right now.

A Letv representative declined to comment to Tech in Asia this morning on the financial arrangements.

According to a statement released by Letv, Yongche will continue to operate independently.

Too little too late?

Letv’s move comes at an odd time. The ride-hailing wars in China are fierce, but most of the action is taking place between Didi Kuaidi and Uber. Yongche, while not exactly obscure, is not at the front of the pack. The startup pre-dates Uber and Didi Kuaidi, but an initial focus on old-school car rentals and pre-booked limo rides (which it still offers) meant the fledgling company remained small while rivals focused on the fast-growing mobile-only, on-demand sector.

Mock-up of LeTV’s supercar design.

But perhaps Letv knows what it’s doing. After all, this isn’t the company’s first foray into the transportation industry. Letv, which started out as a Hulu-like site for streaming news, TV shows, and movies, is building a vehicle of its own – an electric supercar that was previewed this summer. A spokesperson from Letv tells Tech in Asia that today’s investment news is part of the company’s “super electric ecosystem” of services.

What, exactly, that ecosystem will entail remains to be seen. Letv is already a big player in online video and consumer electronics – and it looks like it will soon have its say in transportation as well.