Did is now evaluated at $26 billion.
By Dileep Thekkethil
The Beijing-based Chinese transportation network company Didi received a whopping $1 billion investment from the Cupertino-based technology giant Apple, giving it the backing to challenge Uber Technologies.
As per the new deal, Apple will assist Didi in setting up a new ride sharing platform that can handle over 11 million rides a day and serve more than 300 million Chinese people. With the new funding of Didi reaching $3 billion, the company that was founded in 2012 will reach an estimated value of $26 billion.
Uber, which is a multinational online transportation network company headquartered in San Francisco, for the last few years, has been trying to penetrate into China, but their attempts were blocked by local rivals like Didi, which cover more cities and have a huge number of drivers registered under them. Uber is planning to extend its service to 100 more Chinese cities by the end of this year.
Lately, the rivalry between Didi and Uber got fierce after both companies started to spend more money on advertisements as a means to raise market share and to get more drivers registered. Adding to this, they have also highly subsidized customer fares.
Chi Tsang, an analyst at HSBC Securities Asia was quoted by Bloomberg saying, “Didi’s a good partner to have, it’s a good operator, and could provide additional collaboration with Alibaba and Tencent.”
Didi has the support of a host of other accomplished Chinese investors such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd., country’s two biggest Internet companies.
In the meanwhile, Apple has been under pressure after the iPhone manufacturers registered a decrease in the sales of its smartphones for the first time ever.
Apple CEO Tim Cook in a statement said, “Didi exemplifies the innovation taking place in the iOS developer community in China.” He added, “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.”