Autonomous driving firm Pony.ai has raised around $500 million in its latest funding round, led by an investment by Japan's largest automaker Toyota Motor Corp, two people with direct knowledge of the matter told Reuters.
Toyota's cheque of around $400 million marks its biggest investment in an autonomous driving company with a Chinese background, the sources said on condition of anonymity as they were not authorised to speak to media.
The latest fundraising values the three-year-old firm, already backed by Sequoia Capital China and Beijing Kunlun Tech Co, at around $3 billion, the people said.
They added that some of Pony.ai's existing investors had joined the financing, but did not specify names.
Pony.ai, which has partnerships with automakers Hyundai and GAC, declined to comment. A Beijing-based spokesman for Toyota declined to comment.
The investment by Toyota comes at a time when global carmakers, technology firms, start-ups and investors - including Tesla, Alphabet Inc's Waymo and Uber - are pouring capital into developing self-driving vehicles.
Over the past two years, 323 deals related to autonomous cars raised a total of $14.6 billion worldwide, according to data provider PitchBook, even amid concerns about the technology given its high cost and complexity.
The Silicon Valley-based startup Pony.ai - co-founded by CEO James Peng, a former executive at China's Baidu, and chief technology officer Lou Tiancheng, a former Google and Baidu engineer - is already testing autonomous vehicles in California, Beijing and Guangzhou.
The firm is focusing on achieving "Level 4", or fully autonomous standards, in which the car can handle all aspects of driving in most circumstances with no human intervention.
The latest funding will support Pony.ai's future robotaxi operations and technology development, one of the sources said.
Pony.ai is not the first time that Toyota, which sold more than 10 million cars globally last year, has invested in firms focused on autonomous driving and mobility services.
Its autonomous vehicle partnerships include a venture with SoftBank Corp and an investment in robotaxi developer Uber ATG. Last year, it invested $600 million in Chinese ride-hailing giant Didi Chuxing and a new joint venture to develop mobility services.
However, the Japanese carmaker, which has researched into autonomous driving technologies mostly through in-house engineers and this year will launch its first vehicle with autonomous highway driving capabilities, has been lagging rivals in bringing self-driving cars to market.
It has taken a long view towards the technology, saying it will take decades for cars to drive themselves on roads.(Reporting by Julie Zhu and Yilei Sun, additional reporting by Norihiko Shirouzu and Naomi Tajitsu; Editing by Himani Sarkar)