BERLIN, Oct 13 (Reuters) - Volkswagen's software unit Cariad will spend more than $2 billion and take a 60% stake in a new venture with Chinese technology firm Horizon Robotics, it said on Thursday, tackling two big challenges: software and the Chinese market.

The carmaker will invest $1 billion in Horizon Robotics and a further 1.3 billion euros ($1.26 billion) in the joint venture, with the transaction to be completed in the first half of 2023.

Together the companies will develop technology that can integrate numerous functions for autonomous driving onto a single chip that will be available only in China.

The venture will mean Volkswagen has a supplier in each major region - North America, Europe and China - given its existing supply relationships with U.S. chipmaker Qualcomm and Franco-Italian STMicrolectronics.

In contrast to the partnership with Qualcomm, Volkswagen's software unit Cariad will play an active role in developing the chip technology with Horizon Robotics, and the know-how will be shared across the Volkswagen Group, the carmaker's China chief Ralf Brandstaetter said.

"That's why this cooperation with Horizon Robotics is deeper," he added.

Its part of a wider push by Volkswagen to strengthen its software offering and make its mark on the Chinese electric vehicle market, where it lags domestic competitors - notably BYD - and Tesla.

Horizon Robotics, founded in Beijing in 2015, has supplied customers including BYD, Volkswagen's Audi, Continental , Li Auto and SAIC, according to its website.

Investors include carmakers like BYD and Great Wall Motors as well as Intel. ($1 = 1.0283 euros) (Reporting by Victoria Waldersee Editing by Madeline Chambers, Miranda Murray and Barbara Lewis)