$1.44 Billion Chinese Fintech “Fund of Funds” to Focus on Blockchain
Ramping up its efforts to become a dominant Fintech hub in Asia, a 10 billion yuan (approx. $1.44 billion) fund was launched in Beijing, China, focusing mergers and acquisitions in the sector while seeking to nurture enterprises and startups in the industry.
Titled ‘Asia Fintech Merger and Acquisition Fund of Funds’, the fund was founded by both state-owned capital and private funds to launch in the last week of December 2016.
Established by Hong Kong-based industry investment holding firm Credit China Fintech Holdings Ltd and its subsidiaries the fund also sees benefactors in major state-owned financial asset management firm China Huarong Asset Management and; private publishing firm Shanghai Xinhua Publishing Group, among several others.
Revealing the areas in which the fund will look to invest in, Credit China Fintech director Sheng Jia stated in quotes reported by China Daily:
Our investment will center on leading companies in the fields of big data, AI, cloud computing, mobile payment, supply chain financing and blockchain.
A managing partner at the fund further revealed that it was already engaging in a number of projects. Specifically, the projects covered include blockchain infrastructure provision, AI-based credit service platforms and consumption financing, empowered by big-data.
Fintech Investments Swell
In the face of competition from the likes of Singapore and Japan, China is seeing soaring investment in the Fintech sector. The announce of the fund coincides with claims that state China is outperforming other Asian markets in its pace, scale and complexity of Fintech development.
The most recent Fintech-related figures show that investment surged by $8.8 billion between July 2015 to June 2016, representing a 252% rise since the turn of the decade. The investment into Fintech in China also shows a telling impact on the rest of the industry in Asia. In the first half of 2016, the Asian Fintech saw investment of $10 billion, far ahead than North America at $4.6 billion and Europe at $1.8 billion.
The Chinese government’s much-publicized interest in studying and developing blockchain technologies is further fueling investments into the industry. Taking a leaf out of bitcoin’s core characteristic as a digital currency, the Chinese government is notably endeavoring to launch its own central bank-issued digital currency. The development of blockchain technology is specifically mentioned in China’s recent “5-year plan”, alongside the likes cloud computing, machine learning and artificial intelligence.
The billion-dollar fund’s announcement comes within weeks of a $20 million bitcoin- and blockchain- specific fund called Huiyin Blockchain Ventures. Having already invested in the likes of bitcoin-based marketplace Purse.io and Indian bitcoin exchange Unocoin, the fund will seek to make investments in the digital currency and blockchain industry, in China and beyond.
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