(Yicai Global) April 21 -- A unit of Chinese navigation software provider Navinfo specializing in high-precision positioning technology development and services yesterday got CNY120 million (USD17 million) from the investment arm of Chinese tech giant Tencent Holdings, Navinfo said in a statement the same day.

Beijing Sixents Technology, the Navinfo unit, recently secured CNY120 million in funding from Tencent’s Linzhi Tencent Technology investment subsidiary. Shenzhen-based Tencent will hold a 9.53 percent share in Sixents post-investment. The target is a tech company that provides a centimeter-level high precision positioning development platform, per the statement.

The two will cooperate in data and cloud computing technologies. Tencent invested nearly CNY1.17 billion in Navinfo in 2014. Tencent’s unit Shenzhen Tencent Industrial Investment Fund currently holds a 9.75 percent stake as its second-largest shareholder. Tencent and Navinfo are partners in autonomous driving map data technology.

The amount of this deal is based on the target firm's pre-investment valuation of CNY1.12 billion (USD158.2 million), per the statement. Navinfo will remain Sixents Technology's largest shareholder, though its ratio will fall to 35.72 percent from 40.18 percent as it is not participating in the investment.

Beijing-based Navinfo’s shares [SHE:002405] opened up almost 3 percent higher on the news, but then gradually subsided in mid-afternoon along with the overall market to CNY15.19 (USD2.15), down 0.66 percent.

Sixents’ product research and development features a long cycle and requires long-term capital expenditures and the deal will thus help it gain adequate strategic resources and financial support, Navinfo said.

Navinfo develops navigation software, digital map software and other such products. It also runs chip manufacturing, vehicle networking technology, and other businesses.

Editor: Ben Armour