Baidu is buying a minority stake in Uber, giving the car-booking company a boost as it expands in China, according to a person familiar with the matter.
Uber will receive cash and non-cash assets, including Baidu's online resources as owner of China's biggest internet search engine, the person said. The investment may be worth as much as $600 million, China National Radio reported earlier.
Baidu's investment gives the search company a slice of the market in China that has been dominated by startups backed by Alibaba Group and Tencent Holdings, the nation's biggest internet companies. Uber is expanding in China and hiring in 14 cities, according to a July 1 LinkedIn post.
"Uber needs a local player like Baidu that really understands the Chinese market," said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. "Baidu is trying to promote its mobile payment system, Uber would help it gain more traffic and boost its location-based services."
Baidu will make an announcement on Dec. 17 about an investment with a U.S. startup that is now a household name, said Kaiser Kuo, a Beijing-based spokesman for Baidu. Mr. Kuo declined to identify the investment or comment further.
Evelyn Tay, a spokeswoman for Uber, didn't respond to a phone call and two e-mails seeking comment.
San Francisco-based Uber this month completed a round of funding that valued the car-booking application at $40 billion. An Uber representative this month said the company may raise as much as $600 million more if other investors decide to come into the most recent funding round at a later point.
The car-booking app is now valued at four times that of other elite Silicon Valley startups, such as Airbnb. Uber's value also dwarfs Tesla Motors, which has a market capitalization of about $26 billion. General Motors, the largest U.S. automaker, has a market value of $52 billion.
Uber, which has raised $2.5 billion since its inception in 2009, is facing an increasing number of regulatory and legal hurdles with its app challenged from India to California. -- Bloomberg News