Chinese ridesharing app 51yongche raises series C worth ‘tens of millions’

Chinese carpool app 51yongche announced Friday that it has raised a series C funding round in the “tens of millions” USD. The exact sum of the round was not disclosed, but the funding was led by Baidu, and Sequoia Capital also participated.

51yongche is a relatively new entrant to China’s ridesharing market, but it has already raised money from a number of high profile investors: Xiaomi CEO Lei Jun started things off with an angel investment, Innovation Works led the company’s series A, and Sequoia led its series B. 51yongche CEO Li Huabing told reporters that Baidu’s investment in this latest round is “an enormous acknowledgement” of the strength of this market and the 51yongche team.

The funding round should help the Uber-style app compete, but China’s taxi/ridesharing app market is already quite crowded. Other major players include Uber itself, Kuaidi Dache and Didi Dache (which are merging), and Yidao Yongche. 51yongche may have the funding of some major players, but at present its reach is still quite limited; the service operates in just four cities right now. (For comparison, Kuaidi Dache currently covers 306 cities).

Interestingly, Baidu may be hedging its bets a bit with this investment, which is at least its third in the ridesharing market. The company reportedly participated in Yidao Yongche’s series C round last fall, and it also invested in Uber late last year. Now, amidst rumors that Yidao Yongche and Uber are considering a merger, Baidu has invested in yet another competitor in the ridesharing space.

The road ahead – no pun intended – is likely to be difficult for all of Baidu’s portfolio companies in this space. Merged competitors Kuaidi Dache and Didi Dache are among China’s most well-funded startups, and there is also the concern that this market could be regulated out of existence. Ridesharing apps are still operating in a legal gray area in many cities, and just last month China’s minister of transportation proclaimed that “private cars will never [be allowed to] operate as commercial cars.”