Ride-hailing app Uber is the giant among start-ups, worth a reported $50 billion and a symbol of the excess and ambition in America's tech sector.
But the company's global ambitions have stalled in China, as both a well-funded competitor and government protectionism may relegate it to minor player status.
Its chief Chinese rival is Didi Kuaidi, valued at $12 billion after closing a $3 billion round of fundraising last week. Backers include Tencent and Alibaba, and estimates of their market share in China vary between 60 and 80 percent, making them the clear leader in the Chinese private car space.
Because of Didi Kuaidi's backing—which also includes China Investment Corporation (CIC), the nation's sovereign wealth fund—the company "is better protected in the local market," said Greg Tarr, partner at CrossPacific Capital. Having backing from local government investors is necessary for success in China, he said.
"You can win, but you can't win, is what I keep telling people in China. Uber is so politically savvy and aggressive, I can respect that they're going after it," said Tarr. "When you have great technology and a great business model but don't understand some of those local business premises ... West Coast aggressiveness will only get you so far."