Now, they have added another to the list: sharing big investors who are backing both companies, even though they are fierce rivals.
Uber, the leading ride service in the United States and much of the world, and Didi Chuxing, which claims 87 percent of the Chinese market for private vehicle ride-hailing, now share at least four investors: asset manager BlackRock, Chinese investment manager Hillhouse Capital Group, hedge fund Tiger Global and insurer China Life, according to investment records and sources familiar with the deals.
"It's very unusual to allow the same parties to invest and get information rights of sworn mortal enemies," said Max Wolff, chief economist at Manhattan Venture Partners. "But then again, it's also not common to raise $14 billion as a seven-year-old pre-IPO company."
Uber has raised more than $13 billion in equity and debt financing since it started in 2009. Didi this week confirmed a $7.3 billion funding round, bringing total fundraising to more than $10 billion.
(Also see: Didi Said to End Funding at $28 Billion Value)
The practice of backing competitors raises concerns about conflicts of interest, information sharing and whether one company may succeed at the other's expense, according to investors, academics and dealmakers.
"I think it looks bad," said Rory McDonald, an assistant professor at Harvard Business School who has done research on the topic. "These firms are still private, they are still growing and making strategic choices, and those choices are going to matter a whole lot."
According to McDonald's research, companies that have a link to a competitor through a shared investor are on average less competitive and less innovative than if they did not have that tie.
Uber said it does not have concerns about sharing investors with Didi and none of them had board seats or board observer seats, so they have less access to and control over the company.
Didi declined to comment.
The four investors came in at a later stage in the companies' lives, and likely will not have the influence and close relationships that early-stage venture capitalists would, people who are familiar with such deals say. And for funds such as BlackRock, investments are most often made in isolation by individual fund management teams
Startup investors generally try to avoid backing competing startups. But it happens on occasion: venture firm Andreessen Horowitz backed both photo-sharing startups Instagram and PicPlz. The firm later gave back its information access rights to Instagram and did not invest further. PicPlz eventually shut down.
But as in the Andreessen Horowitz case, the conflict in venture capital often happens when a startup changes focus or creates a new product, months or years after the VC invested.
What has raised alarms with the Uber and Didi investments is that the companies are already in conflict, and still investors are rushing headlong into both, say investors and industry experts.
The four common investors are not betting on both companies to hedge one against the other, rather, they are putting the two together to get global coverage, said Paul Boyd, managing director at ClearPath Capital Partners, a wealth management company.
The four common investors have funded Uber Global and not Uber China, a separate entity, according to a person familiar with the matter.
Investors think Uber's future looks bright outside of China, but their backing of both companies signals Didi has the advantage in China, Boyd said.
Regardless, the double dipping will likely create challenges for investors and the companies. Investors may be limited in their information rights and excluded from sensitive or competitive information, according to attorneys. Companies will have to worry about how much to share with investors who are also close with their biggest competitor.
"Uber will not be comfortable allowing its investors to have carte blanche access to sensitive information where that information could find its way to Didi," said Nate Gallon, a partner at Hogan Lovells law firm.
© Thomson Reuters 2016