Alibaba may be buying stake in radio cab service Meru

Chinese e-commerce giant, Alibaba is planning to make a strategic investment in radio cab service, Meru following which the Mumbai-based firm is likely to be valued at  $400 million.

A report in the Business Standard today said that India Value Fund (IVF) which recently invested $50 million (over Rs 300 crore) in Meru, will divulge its stake to make way for Aliababa.

IVF currently  holds 80% stake in the cab aggregator.

Meru Cabs, the oldest taxi services company in India, plans to raise another $100 million from a clutch of new investors this month.

Alibaba is already an active player in China’s cab aggregation space. China’s largest taxi booking app, Tencent Holdings has merged with its biggest competitor Kuaidi Dache, which is backed by Alibaba, Softbank and Tiger Globa, the BS report said.

Interestingly, Alibaba’s interest to invest in Meru, comes after Softbank’s ( a key investor in Alibaba) $210 million investment in Bangalore-based Ola.  Recently, Ola had acquired TaxiForSure for $200 million.

Of late India’s taxi services market  has received immense attention from global investors primarily because  the ‘radio taxi’ model has emerged as the fastest-growing and most reliable form of public transport.

Currently there are 19 radio taxi operators in the country, including Mega Cabs, Easy Cabs, Meru Cabs, and Tab Cabs.