Tencent, Alibaba Team To Create $1.45B Car-Sharing Service

Another startup has appeared to challenge Didi in China, and this one has backing by some of the biggest financial names in the industry.

TechCrunch reported that T3, which stands for top 3, has launched in the country with a dozen outfits behind it, including state automakers and FinTech giants. The new venture sets out with $1.45 billion in funding.

The money will go to “car-sharing services powered by renewable energy,” which is in line with Beijing’s initiatives to encourage electric transportation. The investors include Alibaba and Tencent, two of China’s biggest companies.

The effort to combine private and state money is called “mixed reform,” and it’s a push to help state industries innovate and be more efficient.

The idea is for T3 to be driven solely by the market, and to create a “smart mobility ecosystem” by using technical knowledge from tech companies and the manufacturing ability of the car makers.

Tencent and Alibaba are often at odds in the country, and having them both co-invest in a project is rare. Both companies are also investors in Didi, although that came about indirectly, with the merger of Didi and Alibaba-backed Kuaidi.

The two companies have secondary roles in the new venture, and the largest shareholder is Suning, with 17.42 percent equity. Automakers FAW Group, Dongfeng Motor and Changan Automobile will each get 16.39 percent portion as the second-largest holders, and the rest is divided among the others.

A fleet of about 5,000 cars is expected to appear on the streets of Nanjing around June. The new venture begins at the same time Didi is struggling with two passenger murders and attempting to shore up security procedures.

Many traditional car manufacturers are attempting to infiltrate the ride-hailing market, as new regulations in China favor companies with car assets. Other challengers to Didi’s throne include Caocao, a chauffeur ride-hailing app and BWM, a foreign car manufacturer.