(Adds details of Daimler taxi investments, Uber retreats)
By Eric Auchard
LONDON, May 30 (Reuters) - Estonia's Taxify is set to step up its fight against global rival Uber across Europe and Africa after raising $175 million in funding from a group led by German automaker Daimler.
Daimler, already a majority owner or significant investor in a string of online taxi services across Europe and the Middle East, is adding Taxify to its investment portfolio, the two companies said in a statement on Wednesday.
Taxify, which has grabbed business from Uber in Central and Eastern Europe and major African cities, said it will use the investment to develop its technology and further penetrate its existing regional markets. It counts 10 million passengers and 500,000 drivers in the more than 25 countries where it operates.
Daimler is majority owner of MyTaxi, which is a major online taxi player in Germany, and a rival to Uber in Britain, Ireland and Spain. The automotive giant is also an investor in Uber rivals Chauffeur-privé of France, and Careem, which operates in cities across the Middle East.
Daimler, along with European venture fund Korelya Capital and TransferWise co-founder Taavet Hinrikus, joined a number of existing investors, including Didi Chuxing of China, in a round that brings Taxify's valuation to $1 billion, the company said.
A Daimler representative will join Taxify's board.
Uber, which has faced a range of struggles in its businesses over the past two years, remains the world's largest player in the online taxi hailing market outside China.
However, it has retreated from several regional markets, including southeast Asia in March, and has taken a backseat in Russia and several nearby countries after forming a joint venture with Russia's Yandex. (Reporting by Eric Auchard in London; Editing by Gopakumar Warrier)