After spending billions of dollars in recent years to compete with each other, Uber China is set to merge with Didi Chuxing, the biggest ride-hailing service in the country, creating a behemoth valued at $35 billion, sources tell Bloomberg.
Investors in Uber China will reportedly receive a 20% stake in the combined company and Didi will make a $1 billion investment in Uber at a $68 billion valuation.
In a blog post obtained by Bloomberg, Uber CEO Travis Kalanick wrote:
As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term.
UPDATE: The news was confirmed this morning and Kalanick posted the email he sent to his China team in full on Facebook.