Taxi app Kuaidi confirmed a previous rumor on Weibo that it would acquire Dahuangfeng, a Shanghai-based taxi app . It is reported that, at the same time, Alibaba, the existing investor of Kuaidi, will increase investment in the company.

Kuaidi has had more than 20 million user installs and 350,000 drivers on the service. It has covered 35 Chinese cities. Dahuangfeng was launched as lately as in April this year. It gained traction quickly for it offered drivers generous subsidies.

It’s the first merger after a wave of taxi apps emerged in China. It’s not a surprise Kuaidi turns out to be the first acquirer as it is venture backed by Alibaba.

Dahuangfeng can be complementary to Kuaidi as both of them are based in the Yangtze River Delta area. Kuaidi is the dominant one in this area.

Another major player is Didi which is more popular in areas like Beijing. Didi is venture backed by Tencent. It is reported that Didi will be integrated into the next version of Tencent’s maps service.

According to a report released by Internet market research agency Eguan, Kuaidi, Didi and Dahuangfeng have 41.8%, 39.2% and 3.9% in market share, respectively. Dahuangfeng is the fourth largest one. The third is Yaoyaozhaoche which has a 9% market share.

Tracey Xiang is Beijing, China-based tech writer. Reach her at