China's private rocket developer Orienspace has raised nearly 600 million yuan ($83.67 million) to fund rocket development, it said on Wednesday, as China's demand for commercial launches of satellites is expected to increase.

New investors in the capital raise include Liangxi Science and Technology Innovation Industry Fund of Funds, which is backed by the authority in the Liangxi district of the city of Wuxi, Orienspace said in a statement.

The investment takes the value of Orienspace to about 6 billion yuan, said a person familiar with the matter, who asked not to be named as the information is private.

Shenyin & Wanguo investment, linked to the state-backed securities brokerage Shenwan Hongyuan, Hongtai Aplus and Xin Ding Capital were also among the new investors, and existing shareholders such as HIKE Capital also participated, Orienspace said.

The funding will be used to support the research and manufacturing of an in-house rocket engine based on liquid oxygen and kerosene, as well as the development of Orienspace's Gravity-2 rocket, which is designed to be reusable, the statement said.

Orienspace said it aims to achieve the debut launch of Gravity-2 within about two years.

Founded in 2020, Orienspace earlier this month launched its Gravity-1 rocket, which relies on solid materials in the engine to give it thrust.

Several private Chinese rocket startups have successfully lifted their rockets in test or commercial launches last year, as they prepare to meet demand in China's expanding commercial space industry.

Orienspace's CEO said last year the company had secured orders to launch several hundred satellites.

Investors have said they expect that China's race to build its constellation of satellites to catch up with Elon Musk's Starlink will boost demand for rocket launch services, including from private players, to lift satellites into space.

(Reporting by Roxanne Liu and Ryan Woo; editing by Barbara Lewis)