Unlisted Alibaba will invest $294 million to become the largest shareholder in the Chinese-based firm, according to a statement from AutoNavi on Friday which confirmed an earlier report from news portal Sina.
The move comes after Alibaba, which competes with Tencent Holidings, acquired an 18 percent stake in Sina Corp's microblogging service Weibo, the Chinese equivalent of Twitter, at the end of April.
Industry watchers widely expect Alibaba - whose founder Jack Ma steps down as chief executive on Friday - to seek an initial public offering, possibly this year. Some say the company could fetch a valuation as high as Facebook Inc's $100 billion.
Shares in AutoNavi have risen more than 30 percent since the start of May and stand at $14.77 per share.
Alibaba runs Taobao Marketplace, China's largest consumer-focused e-commerce website; business-to-business commerce platform Alibaba.com; and Alipay, a PayPal-like online payment platform.