Tesla has gained significant financial backing by way of a 5-percent investment by Chinese tech giant Tencent Holdings.

The company’s $1.78 billion stake in the electric automaker, or about 8.2 million shares makes it Tesla’s fifth-largest shareholder. The first four largest shareholders consist of CEO Elon Musk and investment companies Fidelity, Baillie Gifford, and T. Rowe Price.

Along with needing more cash flow for its Model 3 launch later this year, Tesla can tap into these resources for expanding into important overseas markets like China.

In a U.S. regulatory filing from early March, Tesla reported making more than $1 billion in revenue in China last year. That made for more than 15 percent of Tesla’s revenue last year of over $7 billion.

CEO Elon Musk had said China will someday become Tesla’s largest market.

Tencent has been investing in Chinese electric vehicle manufacturing startups. One of these, NextEV, also has a U.S. office in San Jose, Calif., near Tesla’s Palo Alto headquarters.

Like Tesla, NextEV has a presence in testing out self-driving cars in California.

SEE ALSO:  Tesla Sees Over $1 Billion In China Sales Revenue Last Year

NextEV, which has rebranded itself as Nio and is based in Shanghai, has also found another major investor lately through Chinese search engine giant Baidu.

Tencent has backed at least two other Chinese EV startups, including Future Mobility. Like Nio/NextEV, Future Mobility is working on self-driving EVs. The startup said the first one could be introduced by 2020.

Beyond EV makers, Tencent has put money in Didi Chuxing, the world’s second largest ride-hailing company after Uber. The company has also invested in Lyft, Uber’s chief rival in the U.S.

Tesla earlier this month had already raised about $1.2 billion by selling common shares and convertible debt.

Automotive News