Momenta, a Chinese driverless technology startup, is raising a fresh round of funding that could value the company at around $6 billion, two people familiar with the matter told CNBC.

The valuation could change as the funding progresses, one of the people, who wished to remain anonymous because they were not authorized to discuss the details publicly, said.

Bloomberg first reported the deal with a valuation above $5 billion.

Momenta declined to comment when contacted by CNBC.

The Beijing-headquartered company develops software and algorithms that can be used by automakers to give their vehicles some automated driving features. These company claims that its Advanced Driver Assistance Systems (ADAS) allows a car to carry out some functions autonomously such as changing lanes.

This week Momenta and Mercedes-Benz struck a deal to bring the Chinese firm’s technology to the German auto giant’s all-new electric CLA in China. The technology will power Mercedes-Benz’s driver assistance system across highways, urban streets, and parking, the two companies said in a joint press release on Thursday.

Momenta’s technology will eventually be equipped on 40 models developed by Mercedes-Benz, a person familiar with the matter said.

BMW signed a similar deal in June to equip its Neue Klasse electric vehicles in China with Momenta technology.

Momenta’s list of investors include Tencent, Temasek, SAIC Motor, Toyota and Mercedes-Benz.

The company is participating in a competitive market that includes players like Nvidia and Horizon Robotics in China. There are a number of other players in the autonomous driving software space including WeRide and Pony.ai.

Signing with global automakers is a big win for Momenta which is also gearing up for an initial public offering. Reuters reported on Friday that the company is considering shifting its listing to Hong Kong from New York.