HONG KONG (Reuters) - Chinese electric vehicle startup Nio has raised more than $1 billion in its latest fundraising round, led by existing investor Tencent Holdings Ltd, valuing the firm at about $5 billion, two people with knowledge of the matter said.

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New investors in the round include U.S. hedge fund Lone Pine Capital, Chinese investment firm CITIC Capital and Scottish fund manager Baillie Gifford, said one of the people.

The fundraising comes as Beijing has been promoting electric vehicles in its battle with urban smog, with startups flooding the market after it opened up the sector to investment from technology firms and other backers outside the industry.

It marks a hectic news week for Tencent, Asia’s second-most valuable company with a market capitalization of around $475 billion.

Snap Inc said on Wednesday that Tencent had taken a 12 percent stake in the messaging app. A day earlier, Tencent’s e-book unit China Literature Ltd saw its shares surge more than 80 percent in their debut.

Tencent, CITIC Capital and Baillie Gifford didn’t immediately respond to requests for comment on the Nio fundraising. Nio declined to comment. Lone Pine Capital was not immediately available for comment outside of normal business hours.

The sources declined to be named as the financing plans were not public.

Shanghai-based Nio, founded by Chinese internet entrepreneur William Li in 2014, has already attracted big-name investors, counting Tencent as its main backer alongside investment firms Hillhouse Capital Group and Sequoia Capital.

Nio, formerly known as NextEV, is also among the first of a raft of Chinese electric vehicle firms to launch a production vehicle, with many so far only showing concept cars.

Its first mass production car - the ES8 pure-electric, seven-seat sport-utility vehicle is set to be released in mid- December, according to the company. Chairman Li told Reuters in April that the model would offer more features than the Tesla Model X at a lower price.

Tencent is also an investor in U.S. electric car maker Tesla Inc.

Nio has also vowed to bring an autonomous electric car to the U.S. market by 2020. The firm said in April it was teaming up with China’s fourth-largest automaker Chongqing Changan Automobile to form a joint venture to cooperate on researching and selling electric cars.

It was valued at about 20 billion yuan ($3.02 billion) when it raised $600 million in March, according to Chinese media reports at the time.

Tencent’s own news portal, Tencent Technology, first reported Nio’s latest financing round on Wednesday.