Apple Inc. is increasing its investments in mobility by placing $1 billion in Didi, a Chinese ride-hailing and ridesharing company competing with Uber in that major market.
Along with rumors that Apple is moving forward on making electric and autonomous vehicles, the Silicon Valley company is investing in Didi Chuxing and its ridesharing platform that serves more than 11 million rides a day and about 300 million users across China, according to Didi. Apple’s investment brings Didi’s funding round to $3 billion to a startup company now valued at about $26 billion, according to people familiar with the matter.
Along with electric vehicles, China is a hot market for ridesharing and ride-hailing firms. Uber has spent millions of dollars to grow its share of the market, but is far behind Didi with its larger fleet of cars.
Major technology companies beyond Apple see the market potential in that booming market. Didi already has backing from Alibaba Group Holding and Tencent Holdings, the country’s two largest Internet companies.
“Didi’s a good partner to have, it’s a good operator, and could provide additional collaboration with Alibaba and Tencent,” said Chi Tsang, an analyst at HSBC Securities Asia.
Didi, formally known as Xiaoju Kuaizhi Inc., was created last year when separate apps backed by Tencent and Alibaba merged. Didi now serves 400 Chinese cities with 14 million registered drivers, according to the company. Didi is part of an international coalition with Lyft Inc. in the U.S., India’s Ola, and Southeast Asia’s Grab to compete with ridesharing giant Uber.
Uber has set a target of operating in 100 Chinese cities this year. The company said it’s able to invest in the China market because it’s making $1 billion annual profit from its 30 largest global markets. Uber has other challenges that are tapping into profits including a $100 million lawsuit settlement in California to drivers, and having its services in Sweden shut down as it battles regulators and taxi drivers.
Apple’s investment comes as the company seeks other markets, such as automotive and mobility services, to expand beyond computers and smartphone.
“Didi exemplifies the innovation taking place in the iOS developer community in China,” Apple CEO Tim Cook said in Did’s statement. “We are extremely impressed by the business they’ve built and their excellent leadership team, and we look forward to supporting them as they grow.”