Benzinga | Nov 19, 2021 08:54AM EST

Alibaba Ramps Up Ride-Hailing Investment Amid Regulatory Crackdown

Alibaba Group Holding Ltd (NYSE:BABA) agreed to acquire a 10% stake in a Shanghai state-owned online ride-hailing service Dazhong Transportation Group, Nikkei Asia reports. Alibaba will invest 40 million yuan ($6.27 million) in its ride-hailing subsidiary Letzgo.

* Dazhong Transportation will remain the controlling shareholder in Letzgo, although its stake will fall to 46.8% from 52% after the issue of 27.8 million new shares to Alibaba.

* The other two shareholders, Shanghai Dazhong Public Utilities Group and Shanghai Dazhong Enterprise Management, will also see their stakes fall.

* It marks Alibaba's second investment in the shared-transport sector over the past two weeks.

* On November 9, Chinese bike-sharing startup Hello Inc raised $280 million in a funding round led by Alibaba, its fintech affiliate Ant Group.

* Alibaba is also a shareholder in AutoNavi Software Co, which launched a ride-hailing service, Gaode Jiaoche, in 2018.

* The ride-hailing business has been attracting investment since China forced DiDi Global Inc (NYSE:DIDI) to remove 25 apps from domestic app stores amid a probe into data privacy and security violations.

* China had 248 licensed online ride-hailing companies as of September 30, 1.4 million licensed vehicles and almost 3.6 million licensed drivers. The platforms racked up 648.9 million rides in September, 0.9% higher than the previous month.

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* Price Action: BABA shares traded higher by 0.13% at $143.41 in the premarket session on the last check Friday.