HONG KONG -- Chinese technology company LeEco has raised $1.08 billion for LeSEE, its electric car unit.

Chinese companies including Yingda Capital Management, China Minsheng Trust and Legend Holdings, controlling shareholder of PC maker Lenovo Group, were among the investors in the latest funding round.

"It represents a new major milestone in LeSEE's development," said Jia Yueting, founder and chief executive of LeEco group, which is also the parent of Shenzhen-listed video streaming service Leshi Internet Information & Technology on Tuesday. "The participation of major institutions is a testament of their appreciation of the ecosystem business model and the global strategy of LeEco."

Even though LeEco is new to the industry, it "would come up with pretty decent products, by hiring good talents and having a strong willingness to make it work," said Emmanuel Rosner, an analyst at CLSA.

LeEco has recruited people who had worked in other Chinese automobile companies, including SAIC Motor and Guangqi Toyota Motor, a joint venture of Guangzhou Automobile Group and Toyota Motor.

In addition, it has also partnered with other industry players including Britain's luxury sports carmaker Aston Martin and Chinese-backed but California-based Faraday Future which is focused on developing intelligent electric cars.

China's new energy vehicle market is growing rapidly, boosted by government subsidies. The government has paid over 33 billion yuan ($4.95 billion) in subsidies between 2009 and 2015 to buyers of new energy vehicles.

But such incentives have also led to subsidy fraud, which has caused Beijing to tighten control and impose stricter standards on the industry. The finance ministry has also said that it would slowly reduce subsidies with the aim of stopping them altogether by 2020.

China is the world's largest market for electric cars, beating the U.S., and is expected to lead the market until at least 2020.

Leshi shares closed flat in Shenzhen on Wednesday at 46.27 yuan.