Cao Cao Mobility, the ride-hailing unit of Chinese private automaker Geely, announced Monday that it had raised RMB 3.8 billion ($589 million) from investors led by a group of state-owned enterprises. The move came two months after the country’s dominant ride-hailer, Didi Global, was put under an ongoing cybersecurity review.

Why it matters: It is the biggest funding the company has received in two years, Cao Cao said in a statement (in Chinese) published Monday.

Details: This new round brought Cao Cao’s total funding to around RMB 5 billion. Lead investors include Suzhou Xiangcheng Financial Holding Group, an investment company held by the Xiangcheng district government of Suzhou, as well as Suzhou High-Speed Rail New City Group and three other state-controlled enterprises.

• Cao Cao said in the statement that it plans to use the funds to further scale its business, such as upgrading technology and expanding its fleet. 
• The company currently offers passenger transport services in 62 domestic cities, almost double the number that its rival T3 serves, but far behind the footprint of Amap, Alibaba’s ride-hailing and map platform.
• Geely began testing ride-hailing service Cao Cao in the eastern city of Ningbo in late 2015. It raised RMB 1 billion in Series A from several Chinese venture capital firms in January 2018.

Context: Chinese ride-hailing platforms, either backed by tech giants or legacy automakers, have been rushing to take market share from Didi after regulators ordered the ride-hailing giant in early July to temporarily stop adding new customers.

• Meituan’s ride-hailing unit and Cao Cao in July saw their volume of rides increase by 24% and 32%, respectively, from a month earlier, while Didi’s only rose by 13.1% during the same period, according to Ministry of Transport figures (in Chinese).
• In July, on average, Amap completed fewer than 5 million trips while Meituan completed around 1 million trips per day, Chinese media LatePost reported on Monday, citing people familiar with the matter. Didi counted about 25 million rides a day in the first quarter of 2021.

Read more: Didi app ban ignites race for ride-hailing market share