Uber just closed a $1 billion round of funding for its China branch

Uber's China arm has closed its $1 billion fundraising round early, according to two people with knowledge of the matter, with investors still hopeful for the U.S.-based ride service despite strong domestic competition in the car-hailing market.

Investors in Uber's Chinese unit include Hillhouse Capital, Asia's biggest hedge fund, Chinese Internet giant Baidu Inc, China CITIC Bank Corp Ltd, China Life Insurance Co Ltd, Ping An Insurance Group Co of China among others, said one of the people.

A spokeswoman for Uber declined to comment.

The deal was oversubscribed, said the second source directly familiar with the fundraising. According to a fundraising document seen by Reuters last week, this round values UberChina at $7 billion, with the unit planning to list on the mainland by 2020.

To grow in China, the company formally launched a fundraising round on June 22. Four out of the top 10 are now in China, according to an email sent by Uber CEO Travis Kalanick to investors and obtained by the Financial Times earlier this summer.

Guangzhou, Hangzhou, and Chengdu are now the three largest cities on a trips basis, overtaking New York, the email stated. China is now the largest market outside of the U.S., and "at the current growth trajectory, will most likely surpass the US before year-end," Kalanick said in the email to investors.

Uber is growing like crazy in China. Uber's service is taking off in China much faster than it did in the United States. Nine months after launching in Chengdu, Uber has 479 times the trips it had in New York after the same amount of time.

Uber is putting a lot of money into its Chinese growth. Uber previously raised more than $5 billion in several funding rounds, including a $600 million investment from Chinese search engine company Baidu.

(Reporting by Paul Carsten and Engen Tham, additional reporting by Shu Zhang; Editing by Meredith Mazzilli)