View of a signboard of LeTV during the 16th Shanghai International Automobile Industry Exhibition, also known as Auto Shanghai 2015, in Shanghai, April 22, 2015.[Photo/IC]

China ride-hailing app Yidao Yongche said that a unit of Beijing-based technology company LeTV has agreed to invest $700 million in the firm in return for a 70 percent stake, according to an e-mailed statement on Tuesday.

LeTV, which includes Shenzhen-listed Leshi Internet Information and Technology Corp Beijing, earlier on Tuesday said it would acquire the stake, becoming the controlling shareholder, without disclosing the size of its investment.

At face value, the deal would technically make Yidao Yongche a "unicorn" - a tribe of privately held tech firms with valuations of at least $1 billion, supposedly forming the elite of the current generation of start-ups. But the size of that group is growing rapidly, eroding their special status.

Yidao Yongche is also a struggling company, facing up against larger, better-funded rivals like domestic ride-hailing market leader Didi Kuaidi, which is backed by Alibaba Group Holding Ltd and Tencent Holdings Ltd among others, and US firm Uber Technologies Inc.

The market is fiercely competitive, with billions of dollars being invested to lure in riders with steep discounts and to subsidise the money earned by drivers.

The deal is part of LeTV's expansion into the vehicle market. The company, which also develops Internet television and smartphones, said it has been working on an electric-vehicle project named super electric eco-system since December.