Lin Wang, senior director of finance at Asia-based e-commerce provider JD Finance, and his colleagues have been busy growing several companies.
Backed by Tencent, JD.com – also known as Jingdong Mall – set up its JD Finance subsidiary, created out of a company reorganisation in 2016.
Insurance provider China Taiping Insurance co-led a $1bn share subscription for JD Finance later billed as a series A round by JD.com in 2016. VC firm Sequoia Capital and investment firm China Harvest Investments co-led that round.
JD.com’s decision to divest its 68.6% stakeholding in JD Finance was a first step towards an initial public offering for the financial services spinout and a success for Wang, who as a director for the chief financial officer, Sidney Xuande Huang, is also a vice-president of JD Finance.
The divestment last year provided JD.com with a RMB14.3bn ($2bn) windfall. The parent company will also secure the rights to 40% of JD Finance’s future pre-tax profit, which may then be exchanged for a 40% equity stake, pending regulatory approval.
JD Finance, the financial services arm of China-based e-commerce firm JD.com, has formally launched a strategic venture capital fund called Qianshu Capital, China Money Network reported.
The unit will take minority stakes in domestic startups looking to meet consumer demand, and will invest at seed and series A stage. JD has not revealed the size of the fund or how much it will typically provide at a time.
Qianshu Capital is already active and its portfolio companies so far include connected radio producer AirSmart, smart running shoe developer Runmi Technology and towel designer Zuishenghuo.
Those companies make up part of a portfolio that spans lifestyle technology, entertainment and media, and personal health, fashion and cosmetic products.
Qianshu utilises a big data model to analyse potential funding recipients based both on their business plans and data already generated by JD Finance’s crowdfunding efforts. It will also offer portfolio companies training, consulting and financial services.
Separately, JD Finance has backed companies, such as Meiliche Jinrong, the automotive-focused spinoff of China-based online lending platform Meili Jinrong, which recently received RMB239m ($38m) in series B capital.
And amid investing in others, JD Finance, which was launched by JD.com in 2013, was reportedly seeking $2bn in funding for itself from investors, including food processing firm Cofco, China Money Network reported.
Cofco, also known as China National Cereals, Oils and Foodstuffs Corporation, has entered discussions with JD finance over a lead investment in the round, as has investment bank China International Capital.
The deal is expected to value JD Finance at $26bn to $30bn, unnamed sources told China Securities Journal.
The funding will enable JD Finance to acquire financial licenses and to boost its research and market development activities.