Tencent tips in $100 million funding round for China’s leading taxi-hailing app – is WeChat integration next?

Chinese taxi booking app Didi Dache has started off the new year with a bang, receiving a fresh round of $100 million in funding, according to Tencent Tech.

Citic PE is leading the series C funding round with a contribution of $60 million, while tech giant Tencent (HKG: 0700) follows with an investment of $30 million. In May 2013, Tencent gave $15 million in funding to the company.

Didi Dache works like most other like-minded transportation apps in the US, though with some key differences. Chinese users in need of a lift can open the app and push a button requesting a ride, and drivers logged onto Didi’s system will in turn receive a notification. However, passengers can optionally add on tips of various sizes in an effort to entice the driver to come pick you up. Unlike Uber, the most-watched car-booking app on an international level, neither Didi nor the driver get to skim off the top of the payment. In most cases, transactions are conducted via cash.

Figures from iResearch show that Didi Dache is the leading taxi-hailing app in China as a whole, in terms of both registered users and daily bookings. Kuaide Dache, a Chinese taxi-hailing app that lets users pay for rides using Alibaba’s Alipay Wallet, trails it by about 30 percent for both metrics. Other competitors include Yongche’s Dache Xiaomi, Yaoyao Zhaoche, and a wealth of other players.

Despite iResearch’s figures, the Tencent Tech report describes the taxi-app battle in China as “in stalemate,” which has reportedly led Didi Dache to begin subsidizing its drivers up to RMB 100 per ride (about $16 US) to pick up passengers.

See: 10 taxi apps you can use across Asia

In addition to the usual horse-race suspense, Chinese taxi-hailing apps also have attracted media attention because on-demand taxi-rides could be the perfect gateway to get China’s smartphone users hooked on online-to-offline payments – a competitive space in the country. If Tencent’s investment sees WeChat integration with Didi Dache, the company will gain easy access to the messaging app’s 270 million monthly active users, and WeChat can get its users in the habit of paying for things using a messaging app.

(Editing by Paul Bischoff)

(Image via Flickr user lobsterstew)