Apple Enter the Venture Capital World With a Big Bang
Apple is one of the biggest corporations in the world in terms of revenues and cash balances, which makes it possible for the company to invest such huge amounts of money on new product every other year. However, the company wants to diversify its revenue generating portfoio and with a cash balance of $215 billion sitting in the bank, they do have the financial strength to flag new ventures that would make the company far more financially secure. After all, cash sitting in the bank loses value rapidly and it is always better to make it work. As a result, Apple have now decided to branch out into the lucrative venture capital business and have also made their investment that has sent ripples across the world of business.
It seems that Apple has identified a sound business that it believes could make a lot of money for the company in the future and the size of the investment is a clear indication that the company hierarchy are serious about their venture capital arm of the business. Last week, Apple released a statement in which it revealed that is has decided to invest a staggering $1 billion in Chinese ride hailing service called Didi Chuxing and considering the fact that the company is already the biggest company of its kind in China, the investment is without a doubt a sound one. China, in spite of its recent trouble, is one of the fastest growing economies in the world and the investment provides Apple with a toe hold on a market that is all set to create enormous value for investors over the next decades.
Apple CEO Tim Cook said, "We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market," "Didi exemplifies the innovation taking place in the iOS developer community in China." Additionally, he stated that he was "extremely impressed by the business they've built and their excellent leadership team, and we look forward to supporting them as they grow."
