Popular taxi-hailing smartphone app Kuaidi Dache has ensured an investment of $600 million to strengthen its position in the market.
In a latest round of financing, Kuaidi got the largest amount of investment from Japan's Softbank Corp., with Alibaba Group and Tiger Global Management contributing the rest.
The capital raised will be used for expanding services and upgrading technology, according to Kuaidi CEO Lu Chuanwei.
Lu added that the money will help Kuaidi expand its services in China and make a further positive impact on urban transportation.
Financial news portal caixin.com published that most of the funds will be used for improving the services of Kuaidi ONE, a car-hiring app.
The fund will also be used to broaden the size of the recently established insurance fund that offers compensation to passengers in case of an accident.
The fundraising by Kuaidi came after its closest competitor Didi Dache, which is backed by Internet giant Tencent Holdings, raised $700 million from investors including investment group DST and Singapore's state-linked investment giant Temasek in Dec. 2014, The Global Times reported.
Two days after the announcement of financing, Beijing authorities banned car-hiring apps from renting cars without taxi licenses, with an aim to ensure passenger safety and regulate the car rental market.
Zhao Zhanling, a Beijing-based Internet law expert, pointed out that the government's decision has seriously affected car-hiring apps and the companies should make more efforts to resolve the issue.
Kuaidi was launched in 2012 with its integrated mapping and third-party payment technology and has more than 1 million taxis in more than 300 cities across China and Hong Kong.