Bengaluru: The $1 billion investment by Apple Inc. in China’s largest cab-hailing service Didi Chuxing will provide a shot in the arm for Indian unicorn Ola, which counts Didi as a strategic investor, in its market share battle with rival Uber.

The maker of iPhones and iPads said on Friday it will invest as much as $1 billion in Didi in a surprise deal that will come as a blow to its fellow California-based tech giant Uber.

Uber’s controversial chief executive officer Travis Kalanick took news of Apple investing in Didi in his stride.

“girlfriend owns @apple shares which makes her a didi investor," Kalanick said on Twitter.

Yet, there’s no getting away from the fact that Uber is up against a formidable rival.

Didi already counts e-commerce giant Alibaba Group and Tencent Holdings, two of the three largest Internet companies in China, as its key backers apart from Japan’s SoftBank Group, some Chinese state-owned firms and other marquee investors.

In December, Ola, Didi and two other international cab-hailing services, US-based Lyft and Singapore-based GrabTaxi, entered a global ride-share agreement to take on common enemy Uber, the most valuable Internet start-up that wants to dominate urban transportation across the world.

Ola raised some $500 million from Didi, SoftBank and others in November.

While the global alliance hasn’t translated into any meaningful change in business for any of the four companies, the sheer amount of funds raised by Didi over the past 18 months—more than $4 billion—gives the company significant firepower to fund peers such as Ola, which is scrambling to keep Uber at bay in India.

For Uber to realize its ambition of dominating urban transportation across the world, it will need to be No. 1 in either India or China, if not both. Uber is the undisputed market leader in its home country, but has faced significant regulatory and business challenges in India and China.

By all accounts, Didi dominates the cab-hailing and ride-sharing market in China, though Uber and Didi disagree on exact market share numbers.

In India, while Ola is still the market leader, Uber has caught up with its local rival far more than it has with Didi, according to investors and analysts. (Even here, the two firms disagree on exact market share numbers)

If Didi continues to dominate China, the stakes for Uber will increase dramatically in India.

For Ola, having access to a would-be Uber conqueror in Didi Chuxing may prove to be invaluable, especially given the current investor perception that Indian unicorns are overvalued.

“It’s good news that a company which is as cash-rich as Apple is looking at investing this serious amount of money in other companies. In a way, it endorses the market opportunity which is there in this service. People like Ola should get a major boost, as this shows that this is a serious opportunity. Even other investors will look at it more positively now," said Harminder Sahni, managing director at consulting firm Wazir Advisors.

Sadhana Chathurvedula contributed to this story.

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