Apple invests $1 billion in Chinese ride-hailing service Didi Chuxing

Fri May 13, 2016 5:44am EDT
 
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By Julia Love

(Reuters) - Apple Inc (AAPL.O: Quote) said on Thursday it has invested $1 billion in Chinese ride-hailing service Didi Chuxing, a move that Apple Chief Executive Tim Cook said would help the company better understand the critical Chinese market.

The tech giant's rare investment gives it a stake in two burgeoning waves of technology - the sharing economy and car technology - as the iPhone business that propelled it to record profitability shows signs of maturing.

Apple is trying to reinvigorate sales in China, where it has come under greater pressure from regulators, and Cook is traveling to the country this month.

The move aligns Apple with Uber Technologies Inc's chief rival in China, as automakers and technology companies forge new alliances and make cross investments. General Motors (GM.N: Quote), for example, recently bought autonomous driving technology company Cruise Automation and has also taken a stake in U.S. ride-sharing company Lyft.

Cook said in an interview that he saw opportunities for Apple and Didi Chuxing to collaborate in the future.

"We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market," he said. "Of course, we believe it will deliver a strong return for our invested capital over time as well."

Didi Chuxing, formerly known as Didi Kuaidi, said in a statement that this was the single largest investment it has ever received. The company, which previously raised several billion dollars, dominates the ride-sharing market in China. The company said it completes more than 11 million rides a day, with more than 87 percent of the market for private car-hailing in China.

Though Didi Chuxing is valued at upwards of $20 billion, according to a person familiar with its ongoing funding round, the company has been losing billions in a costly battle with Uber for market share in China.   Continued...

 
A taxi driver is reflected in a side mirror as he uses the Didi Chuxing car-hailing application in Beijing, China, September 22, 2015. REUTERS/Jason Lee