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By Bloomberg

Hangzhou Kuaidi Technology Co. raised $600 million from investors led by SoftBank Corp. as the mobile taxi- booking service expands to gain more users in China.

Alibaba Group Holding Ltd., an existing Kuaidi shareholder, and Tiger Global Management also took part in the funding, the Hangzhou-based company said in an e-mailed statement today. Kuaidi will issue new shares and be valued at more than $2 billion, a person familiar with the matter said yesterday, asking not to be identified because the talks are private.

Kuaidi competes with and Uber Technologies Inc. and Didi Taxi, backed by Tencent Holdings Ltd., for the 500 million people in China using mobile phones to access the Internet for services and entertainment. Kuaidi prefers to pursue an initial public offering rather than be taken over, the company said in July.

“China’s largest Internet companies are investing more because they see taxi-booking apps as a very good way to obtain mobile users,” Li Yujie, an analyst at RHB Research Institute Sdn. in Hong Kong, said by phone. “Competition is quite fierce and they need to burn more money to win users.”

Kuaidi holds 54.4 percent of China’s car-booking market and operates in 358 cities in the nation, including Hong Kong, the company said, citing researcher Analysys International. It has more than 200 million users.

Last year, the company introduced Yi Hao Zhuan Che, a luxury car-booking service that now covers 56 cities in China. The premium service also competes with Uber, whose valuation reached $40 billion in its latest fundraising round in December.

Chinese regulators have cracked down on car-hailing apps including Uber. The Ministry of Transportation last week banned private vehicles from acting like taxis while also endorsing services using licensed vehicles and drivers such as those provided by car-rental firms.