Saturday, 2024 May 25

Embattled Didi rival Yidao Yongche is up for sale again at 50% discount

Taoyun Capital, which acquired a majority stake in online car-hailing platform Yidao Yongche, once seen as a Didi rival, is now seeking a new buyer for the firm. It probably won’t fetch more than half the price it had paid when it took Yiado over from former owners LeEco and Jia Yueting.

Sun Shuming, director of Taoyun’s legal department, said the price then was about RMB 3 billion (US$440.9 million) as that was a debt-bearing deal. Taoyun at that time soaked up a RMB 2.3 billion (US$338 million) debt and provided an extra RMB 600 million ($88.17 million) to RMB 700 million (US$102.87 million) so that drivers of the failing ride-hailing network could finally withdraw cash again.

The estimated new offering price sits at RMB 1.5 billion ($220.4 million), according to analysts. That isn’t too high, as Yidao already has reached a certain scale, said Cui Shudong, secretary of Chinese Passenger Cars Association. Ding Shaojiang, an industry observer, weighed in saying that paying that much would only be worth it if the buyer can make optimal use of  Yidao’s remaining resources.

Founded in 2010, Yidao is one of China’s earliest car-hailing service providers. According to Taoyun, it operates in more than 100 Chinese cities, has tens of millions of registered users and millions of drivers. However, as drivers had trouble withdrawing cash from the platform, the app was pretty much dead.

Yidao has been handed down from one hand to another. The firm’s founder Zhou Hang once accepted a majority-investment from now debt-ridden LeEco and lost control of it. Jia Yueting, LeEco’s founder, is now an internationally known defaulter.

Taoyun admitted in a statement on Monday that it was unable to turn the platform’s fate around after its takeover. He mainly put it on Jia, blaming him for hiding the scale of Yidao’s debt, which was well above the 2.3 billion yuan as Jia claimed.

Editor: Nadine Freischlad

Jingli Song
Jingli Song
I believe Chinese innovation at various level needs to be known by the world.

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