China launches mega $1.44b Asia FinTech M&A Fund of Funds

Chinese 100 yuan banknotes are seen in this picture illustration taken in Beijing May 7, 2013. REUTERS/Petar Kujundzic

Affirming its dominance in the Asian fintech sector, China has launched a mega $1.44 billion Asia FinTech Merger and Acquisition Fund of Funds (Asia FinTech FoF) to focus on investment opportunities in the region.

The fund – led by Hong Kong-listed Credit China FinTech Holdings Ltd along with other China companies Shanghai Xinhua Distribution Group Ltd, China Huarong International and Jilin Province Investment Group Corp Ltd – was launched last Tuesday in Beijing.

“In addition to the aforesaid state-owned enterprises and private enterprises, China Cultural Industry Association, New Times Trust Co Ltd, Shenzhen China Create Group, N-Securities Co Ltd, Beijing Yongyu Investment, Tianjing Borong and Juntong Capital are also partners of the fund,” Credit China FinTech said in a statement issued last Tuesday.

Fintech – the technology-led finance sector solutions that includes online payments, financial software and data analysis – has seen tremendous growth in the past five years attracting investments close to $50 billion globally, according to estimates from Citibank.

Amid this backdrop, while Asia is picking up as it is in early stages in the Fintech sector as compared to other mature markets like US, China has taken a lead to become an international hub like London or Singapore, outperforming many other countries in the region.

According to estimates provided by Credit China FinTech, from July 2015 to June 2016, FinTech related investments in China surged by $8.8 billion, more than doubling from 2010.

“Leveraging on the fund partners’ experiences and competitive advantages in brand recognition, industry resources and expertise, the Fund aims to invest in innovative FinTech enterprises with potential and help them to be the FinTech leaders with our technical know-how and capital resources,” said Credit China FinTech Executive Director Sheng Jia.

According to media reports, the investment will focus on big data, AI, cloud computing, mobile payment, supply chain financing and block chain and the fund already has some projects in the pipeline.

A similar fund, Zhongguancun FOF worth $4.31 billion was launched in October last year in the Zhongguancun area of Beijing.

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