Uber may have a new rival in China, as Yidao Yongche raises $700m
Chinese ride-hailing app, Yidao Yongche, said that a unit of Beijing-based technology company LeTV has agreed to invest $700m in the firm in return for a 70% stake, according to a statement released yesterday. LeTV, which includes Shenzhen-listed Leshi Internet Information and Technology Corp Beijing, confirmed it would acquire the stake, becoming the controlling shareholder, but did not confirm the size of its investment. Yidao Yongche is currently considered a struggling company, facing larger, better-funded rivals like domestic ride-hailing market leader Didi Kuaidi, and of course, Uber. However, the market is fiercely competitive, with billions of dollars being invested, and it seems the time has come for Yidao Yongche to join the battle in a meaningful way.

Ride-hailing in China is heating up, and money is intensifying the competition.

Yidao Yongche, one of China's smaller ride-hailing apps just got a huge investment of $700 million to take on larger players like Uber and market leader Didi Kuaidi.

Its backer, LeTV, said on Tuesday it bought 70% of the firm(opens in a new tab) and will become its controlling shareholder, according to China Daily.

The funding elevates Yidao to "unicorn" status -- an upper crust of $1 billion-plus startups that have managed to reach a billion in value.

LeTV, also known as Leshi Internet Information & Technology, is a Beijing-headquartered firm that does Hulu-like streaming video and produces Android phones. Earlier this year, rumors emerged of its interest in investing in Uber to gain control of the Chinese ride market, but LeTV denied this(opens in a new tab).

Yidao Yongche counts among(opens in a new tab) its backers, the government of Singapore, Qualcomm Ventures and China-based venture firm CBC Capital.

According to analyst firm China Internet Watch, Yidao is the third player(opens in a new tab) in China's private car hailing market, with 8.4% of the market, behind Uber with 10.9%. Didi Kuaidi has the lion's share of 78.3%.

LeTV has been keen on the automotive space for a while. At the beginning of this year, it announced it was starting to build electric cars. Given the company's video background, the eventual LeTV car will be Internet-connected(opens in a new tab) and capable of running apps and content, naturally.

It isn't abandoning its bread and butter trade. LeTV continues to aggressively invest in expanding its foothold in the video market both in the mainland and in Hong Kong, signing large deals(opens in a new tab) with major TV content providers and movie studios.