Apple invests $1bn in Uber’s rival

Apple is investing $1 billion in Didi, giving the Chinese ride-hailing startup a powerful ally and dealing a blow to Uber Technologies as it tries to build its business in the country.

The iPhone maker will help Didi build up a ride-sharing platform that handles more than 11 million rides a day and serves about 300 million users across China, Didi said in a statement on Friday. Didi’s funding round has now reached $3 billion and the company is valued at about $26 billion, according to people familiar with the matter, who asked not to be identified as the matter is private.

Uber is spending millions to try and catch Didi in China yet its business in the country is just a fraction of its local rival, which covers more cities with a bigger fleet of cars. Both companies are in an expensive battle for market share, raising capital needed to recruit drivers and subsidize customer fares.

Prior to adding Apple, Didi had been in the process of raising more than $2 billion at a valuation of about $25 billion, people familiar with the matter have said. The company already has backing from Alibaba and Tencent.

Didi didn’t respond to queries about its funding round and valuation.

Apple’s investment comes as the iPhone maker is under pressure to find other markets to expand in as its main smartphone business slows. CEO Tim Cook has highlighted higher-margin services as a growth area and suggested he would use some of its $200 billion-plus cash hoard for investments. “Didi exemplifies the innovation taking place in the iOS developer community in China,” Cook said in the Chinese company’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.” The company is Uber’s most potent rival and has formed an international coalition with Lyft in the US, India’s Ola and Southeast Asia’s Grab to fight the San Francisco firm.