×

India taxi market heats up with Didi Kuaidi funding for Ola

500166293DR042_Barcelona_Ca
Getty Images

As Uber puts in place plans to enhance its presence in China, its largest Chinese rival in the country is heading overseas.

Chinese taxi-hailing app Didi Kuaidi revealed on Monday that it had invested in Ola, India's largest ride-hailing app. Reuters, which reported on the deal, said the value of the investment was unknown.

Didi Kuaidi, created from a merger between two of China's leading ride-hailing apps, is valued at $16 billion and backed by Alibaba and Tencent. It is one of Uber's biggest competitors in Asia.

The investment in Ola – which controls nearly 80 percent of India's taxi-hailing business and reportedly completes more than 750,000 rides per day – is the latest in a series of bets made by Didi Kuaidi to apply brakes to Uber's frenetic growth.

Last month Didi Kuaidi pumped in an unknown sum to Singapore-based GrabTaxi. It also participated in Lyft's latest funding round, the Wall Street Journal reported. Lyft is Uber's biggest competitor in the U.S.

Uber itself has been eager to increase its presence in China and India. Uber's China arm is closing a $1 billion fundraising round, according to Reuters, a sign it is ready to keep expanding in the country despite strong competition.

Uber recently received a multimillion dollar investment from Chinese search giant Baidu, and integrated Baidu maps and other services into its app.

In India, Uber plans to inject $1 billion to grow its share of the market. Uber received further funding of up to $100 million from Indian conglomerate Tata Group, which makes everything from cars to tea.

Read MoreNext stop for Asian taxi apps: Consolidation

The investment by Didi Kuaidi will support Ola's continued expansion in India. The startup recently announced plans to invest $75 million in a new car leasing program operated by one of its subsidiaries.

Under the program, the subsidiary will buy cars and lease them out to Ola drivers, helping Ola to attract more drivers and giving it greater control over its fleet.

Ola has also differentiated itself by offering supplementary services including a shuttle run, cashless payment and Wi-Fi in some cars, as well as a cafe service available through the app.

Ola co-founder Bhavish Aggarwal told CNBC earlier this year that Ola's aim was to operate in 200 Indian cities by end of 2015.

Didi Kuaidi joins Ola's existing list of investors, who include Falcon Edge, GIC, Tiger Global Management and Japan's SoftBank. Ola raised 14.78 billion rupees ($222.5 million) in its most recent round of funding, Reuters reported.

- Reuters contributed to this report.