Internet company LeTV Holdings Co Ltd took the wheel of car-hailing service provider Yidao Yongche on Tuesday, making the Beijing-based smartphone maker and online video provider the latest tech giant to enter the cash-burning sector.

A unit of LeTV bought a 70 percent stake in Yidao, which is losing a battle against Alibaba Group Holding Ltd and Tencent Holdings Ltd-backed Didi Kuaidi as well as the United States firm Uber Technologies Inc.

LeTV did not disclose the size of the investment, but multiple sources told China Daily the amount was roughly $700 million.

Yidao earlier claimed itself a "unicorn"－a privately held tech company valued above $1 billion.

"The investment enables LeTV to grow further in the automobile industry," LeTV said in a statement. The company announced last year that it will be building next-generation electric vehicles, but is yet to unveil detailed plans. The company has launched an operating system developed for cars earlier this year.

LeTV said the current management team of Yidao will not be replaced.

The share price of Leshi Internet Information and Technology Corp, the core asset of LeTV, jumped by 9.07 percent to 53.14 yuan ($8.37) on Tuesday, after reports of the investment plan.

Zhang Xu, a researcher at Beijing-based consultancy Analysys International, said the LeTV takeover indicates that Yidao has found the going tough.

"Yidao said the LeTV investment is part of its latest round of financing. But to me, the company has practically sold itself to LeTV," Zhang said. "Unlike the well-funded Didi Kuaidi and Uber, Yidao has been lagging."

More than eight out of 10 chauffeur services users in China were using Didi Kuaidi's platform as of June, while less than three chose Yidao, according to an Analysys International report.

"Yidao has been losing customers steadily this year and the company was responsible for just 8.4 percent of chauffeur orders by the end of first quarter," Zhang said.

The chauffeur business has a wider definition in China than in the West. All the passenger transport services that are booked online come under the category of chauffeur business as long as the service was not provided by a taxi.

Didi Kuaidi and Uber had spent multiple-billion dollars over the past years to subsidize drivers and passengers, making them leaders in market share.

It will also take months to see how LeTV will take advantage of its investment. Company CEO Jia Yueting said investing in Yidao means LeTV is ready to advance in new-energy car development, sales and other services.

Zhang from Analysys International said LeTV may consider installing screens in Yidao cars to show passengers online videos.

"The industry needs a little more time to see what exactly Jia is going to do with Yidao," Zhang said.