Insurance firm China Life and internet company Baidu announced a RB7bn ($1.05bn) private equity fund partnership yesterday, Reuters reported, citing a Hong Kong Stock Exchange filing by China Life.
The fund follows a statement coming after a cabinet meeting led by Li Keqiang, Premier of the State Council of the People’s Republic of China, in September 2016 that state-owned companies, which include insurers like China Taiping and China Life, would be allowed to set up venture funds and “insurance companies will be encouraged to invest in startups”.
China Life will put up as much as RMB5.6bn of the capital for the fund, which will be known as Baidu Fund Partnership, while Baidu will provide up to RMB1.4bn. The two China-based corporates will each invest 30% of those figures initially.
Baidu Fund Partnership will target mid and late-stage investments in internet-focused companies, including mobile internet, artificial intelligence and online finance technology companies, with a “significant association” with China.
Baidu has not invested as much in corporate venturing as rivals like Alibaba or Tencent, but it put $3bn into a venture capital vehicle called Baidu Ventures in late 2016 and has backed companies including online real estate portal Lianjia and automotive finance platform Yixin Capital.
China Life does not have a dedicated corporate venturing fund but has made a small number of late-stage investments, funding ride hailing platform Didi Chuxing and Uber China, and medical clinic chain Gu Sheng Tang.
The fund will not be the companies’ first collaboration either. They formed a strategic partnership in March this year to jointly work on technologies including artificial intelligence, big data, cloud computing and digital financial services.