SoftBank, Alibaba and Tiger Global have invested $600 million in Travice Inc, which operates taxi hailing app Kuaidi Dache. Alibaba already owns an undisclosed stake in Kuaidi. Tencent-backed Didi Dache and Alibaba-backed Kuaidi Dache together control 90% of China’s online taxi hailing market. An Alibaba spokesperson told Reuters that SoftBank contributed bulk of funding in the latest round.

Alibaba Group Holding Ltd, SoftBank Invest $600M In Chinese Taxi App

Kuaidi has 54% market share

Kuaidi Dache said the funds will be used to expand and improve its services in China amid growing competition from Didi Dache and Uber. Launched in 2012, Kuaidi books more than one million taxis per day across 300 cities in China and Hong Kong. The company claims to have over 200 million users. According to research firm Analysys International, Kuaidi has 54.4% share in China’s online taxi hailing market.

Alibaba’s latest contribution will add to its existing stake in the company. Sources familiar with the transaction told Bloomberg that the latest funding round values Kuaidi at $2 billion. Kuaidi’s rival Didi Dache recently raised $700 million in Series D funding round. Last month, Baidu announced that it would invest $600 million in Uber to help it expand in China.

Taxi booking firms attractive to online retailers like Alibaba

Research firm iResearch estimates that the number of mobile taxi hailing users will triple from about 15 million in 2013 to 45 million this year. SoftBank is betting big on taxi app companies. Late last year, it invested $210 million in Indian taxi hailing service Olacabs. Tech analysts believe that these rides-on-demand will become an important link in domestic logistics over the long-term, making them attractive to online retailers like Alibaba.

The funding round comes just a week after Chinese regulators banned taxi-hailing apps from using drivers and cars without taxi licenses. The move is aimed at regulating the rapidly-growing sector. SoftBank vice-chairman Nikesh Arora said that Kuaidi has become a dominant player in Chinese taxi booking market. He expects to see further growth.

Alibaba shares inched up 0.22% to $99.80 in pre-market trading Thursday.