Uber Technologies Inc. is selling its China operations to fierce rival Didi Chuxing, ending an expensive price war and freeing it up to focus on other markets and possibly an initial public offering.
The truce brings to an end a bruising battle between the two companies for leadership in China’s fast-growing ride-hailing market. Uber has already lost $2 billion in China in two years there, people familiar with the matter have said, prompting investors to pressure the company to cut a deal. As part of the arrangement, Didi will invest $1 billion in Uber’s global company, people familiar with the matter said.
Uber has said that it’s profitable in the U.S. and Canada, but losses in developing markets have undercut that hard-fought progress. The huge losses in China have been one of the main sticking points holding up Uber’s potential IPO, according to people familiar with the matter.
“The biggest existential threat to Uber over the last two months was that in China they were losing capital in a way that potentially threatened the rest of their worldwide operations,” said Arun Sundararajan, a New York University professor. “The fact is that in the short term it may seen as a loss, but in the long run it’s a good move. Now they can focus on the rest of the world.”
With China settled, Uber can turn to other countries where it’s fighting for market share, such as Grab in Southeast Asia, Ola in India and Lyft Inc. in the U.S.
Didi is buying Uber’s brand, business and data in the country, the Chinese company said in a statement. Uber Technologies and Uber China’s other shareholders, including search giant Baidu Inc., will receive a 20 percent economic stake in the combined company. Didi founder Cheng Wei and Uber Chief Executive Officer Travis Kalanick will join each other’s boards.
“Didi Chuxing and Uber have learned a great deal from each other over the past two years,” said Cheng, who is also CEO, in the statement. “This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level.”
Didi’s valuation after the deal will be $35 billion, said people familiar with the matter, asking not to be named because the details aren’t public. Uber was last valued at almost $68 billion and the arrangement has “removed the big roadblock for an Uber IPO,” Sundararajan said. “Losing money in China would’ve given many pre-IPO investor pause.”
Last year, China’s ride-hailing leaders Didi and Kuaidi joined forces, creating a homegrown juggernaut to fight off Uber. The merged company Didi Chuxing brought together backers Alibaba Group Holding Ltd. and Tencent Holdings Ltd., the country’s most valuable internet businesses. Apple Inc. joined in this year with a $1 billion investment in Didi, in a round that valued the company at about $28 billion. The Chinese government passed a new rule last week that legalized ride-hailing services, paving the way for further expansion of these businesses.
Uber’s investors had been clamoring for the company to sell off its China assets and focus on more promising opportunities.
“As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart,” Kalanick wrote in a blog post obtained by Bloomberg before publication. “I have no doubt that Uber China and Didi Chuxing will be stronger together.”
The deal is subject to government approval. While the combination of the top two players in a market would often raise regulatory scrutiny, officials will have to determine the range of competition. “The ministry of commerce has to define the size of the market and see if the car-hailing business Didi and Uber are offering can be replaced by similar services,” said Deng Zhisong, senior partner at Beijing-based law firm Dentons. “If you count taxi services and public transportation, the car-hailing sector will not have a market share that significant.”
The purchase of Uber’s China business may complicate Didi’s alliance with other ride-hailing startups around the world. Didi had agreed to work with Lyft, Ola and Grab to create a global force to take on Uber. Grab CEO Anthony Tan said in a statement on Monday that the impending deal is a victory for Didi and underscores how the ride-hailing business favors domestic players.
In China, Uber ventured where few U.S. technology companies have succeeded. In 2005, Yahoo! Inc. made a similar deal, selling its businesses in China to Alibaba, along with a $1 billion investment — one of the Silicon Valley company’s best bets.
“China is such a tough market, in terms of regulation, competition and culture; they faced challenges on so many fronts,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “Cooperating with rather than fighting Didi might not be such a bad idea.”
While Uber will walk away from operations in China, it is taking a significant stake in the largest player there. By shedding its massive losses in China, the move could help Uber clear the path for an eventual initial public offering.
“Uber and Didi Chuxing are investing billions of dollars in China, and both companies have yet to turn a profit there,” Kalanick wrote in the blog post. “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.”
15-Month-Old P2P Credit Fintech, P2vest Celebrates 100,000 Users
P2vest, a peer-to-peer lending platform by P2vest Technology Limited, has commemorated gaining 100,000 users on its platform since its launch in 2020.
With a mission to transform the way people access credit and lend money by bringing borrowers and lenders together, the platform states that it allows for quick loan disbursement and a flexible payback plan, safer than offers received from loan sharks.
Cash-strapped borrowers for a while now in Nigeria, have been at the mercy of lenders who use unscrupulous means to recover loans. These lenders who conduct their businesses unprofessionally go as far as marring the integrity and characters of the borrowers and their innocent guarantors.
Promising to provide a better approach to lending and borrowing within peers through the utilization of artificial intelligence, the Founder and CEO of P2vest Technology, Mr Austin Abolusoro says that, ”Our goal at P2vest is to build a platform that delivers on ease of access to credit while also building a credit history. Our approach is different, we are using Artificial Intelligence to ensure credit-worthy Nigerians have access to quick loans.”
According to Abolusoro, the 15-month old financial technology company bridged the gap of loan access by connecting authorised lenders with borrowers, while helping them take control of their debt, grow their businesses, and invest for the future.
“Since we launched (in 2020), we have provided access to quick loans to over 105,000 Nigerians. This is a big achievement for us as we have availed people the chance to access loans for their different needs like setting up of businesses, house renovations, Car loans, paying rent, school loan, medical bills on the platform faster and without delay. While also creating an opportunity for people to borrow more as long as they continue to pay back,” he said.
Speaking on its mode of operation, the company states that it uses the Sharing Economy Technology. The sharing economy technology is a new model of consumption, sharing, collaboration between individuals of goods, services, resources, with or without monetary exchanges via dedicated platforms.
The adoption of the sharing economy technology and its model has allowed the fintech credit world to develop over the years. Its growth now creates room for P2P economy to thrive as they cut out the role of third parties.
On the P2vest platform, users are encouraged to grow their money by “becoming a lender on our easy-to-use platform. Give out loans tailored to you and your income, and earn attractive returns.” Borrowers on the other hand are to provide their accurate info, including bank details, where payments of loan, when due are automatically withdrawn from the accounts.
Angel Investors Plans to List Africa-Focused SPAC Targeting Tech Startup
Angel Investors, Vishal Agarwal an investment banker, and Raj Kulasingam, a corporate lawyer have stated plans to list Africa-focused SPAC targeting only tech startups in the continent.
A report from Bloomberg said the two early-stage investors have been funding African startups since 2017, invested in over 50 startups, and so far made fivefold returns on their investment. They were also part of Acuity Ventures, an early-stage venture capital fund with stakes in Flutterwave Inc. and Paystack before the firms attained unicorn status.
Vishal and Raj saw the successful investment strategy of Swvl Inc. a Dubai-based ridesharing company merging with Queen’s Gambit Growth Capital, a blank-check company. The two investors believed that listing an African-focused SPAC will provide funds for startups needing capital to expand operations in the continent.
Vishal affirmed that investors have developed a keen interest in Africa, he said, “as there is more interest in Africa, we want to give founders a route to market. A SPAC gives acceleration to our founders and is overall a good thing for the ecosystem.”
The growing interest in African startups has been asserted by Briter Bridges in the 2021 African Investment Report, which released data showing that African startups secured $4.69 billion in estimated funding in 2021, where the tech companies dominated the space by gulping $2.9 billion or 62 percent of the total funding.
However, data from SPAC research revealed that less than 1 percent of the 600 New York-listed SPACs are African-focused.
The biggest investment success recorded by Vishal and raj was with Kuda Bank, the African challenger bank, where they invested $600,000 and exited with 14.5 fold gain or $8.7 million in 20 months. Kuda Bank, a unicorn startup is valued at $500 million and has so far raised $91.6 million in funding.
Vishal said, “when we do dealmaking, we are influenced not only by being able to get in at the right price, but being able to come out, We are very conscious about that, and it’s not always straightforward to come out.”
Dario Giuliani, director of Briter Bridges said, “2021 was a year of recognition, where the newly-available resources and the increasing number of international investors shifting mandates to include Africa met hundreds of promising entrepreneurs to support”.
Vishal and Raj just like every investor identified a growing economy in Africa and the increasing tech-savvy youth population, but also the lack of financial infrastructure. The duo plans to fill this gap by investing in about 20 African startups this year.
Apple iOS 14 Users No Longer Receive Security Updates
In a move to push customers to use the iOS 15, the global leading smartphone company, Apple has announced that iOS 14 (iOS and iPad 14.8.1) users will no longer receive security updates.
This announcement comes months after the iPhone and iPad Operating Systems 14 (iOS 14) got its final update in October last year.
Disclosing that they cannot update the iOS 14 version, the users say that they were rather given no option than to use the 15.2.1 version, which the company introduced in June 2021.
According to Apple, the iOS 15 is an update having new features for FaceTime calls, tools to reduce distractions, a new notifications experience, total updates for Safari, Weather, and Maps, and more. iOS 15 also includes new privacy controls in Siri, Mail, and more places across the system to further protect user information.
However, during the launch of iOS 15 in September last year, Apple had assured users who didn’t want to upgrade from iOS 14, that they would still be able to receive critical security updates.
In fact, the iOS 15 is compatible with every iOS 14 device, so there are no hardware conflicts. This gave the impression that both versions, depending on whichever a user chooses, can be used. However, Apple who has been urged to be clear on its security update policy, has directed all users to get the latest OS version, as the former will no longer receive updates.
In a statement to Ars Technica, the smartphone maker noted that allowing both OS to operate was intentional. It also said leaving the previous security updates for iOS 14 was only meant for a temporary grace period, and not a situation where both OS systems could coexist.
Arguing that Apple never mentioned this when it first announced and launched iOS 15, Techspot pointed out that the company still makes available security updates for the previous MacBook operating systems (macOS), alongside its latest one. The two previous macOS versions, Big Sur and Catalina are still allowed to receive updates, alongside Monterey, which is the most recent version of the two. It should be noted that Catalina is a year older than iOS 14.
The company in a space of two months always introduce the latest iPhone, iPad or iPod operating systems. The latest versions, iOS 15.2.1 and 15.beta.3 were released on January 12, 2022. Without updating each versions, it is believed that each iOS can last for a long time. But eventually, apps cannot be used as the iOS isn’t updated. It is also possible that GPS will stop working. The lack of update can affect WiFi too.
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