Chinese investment firm Winreal Investment has reached the first close of a new fund at 1 billion yuan ($146 million) from investors including government-backed funds as the company seeks to promote the development of the 5G industry much-highlighted by Beijing.
The new fund, whose name can be translated into “Rongteng 5G Industry Fund,” targets to raise 2 billion yuan ($292 million) in total. The investment vehicle was initially launched in June 2019 and is expected to reach the final closing in the first half of 2020, according to a recent statement.
Its investors include SAIC Capital, the corporate venture arm of Chinese state-owned automaker SACI Motor, Hangzhou-based office and home furniture firm Sunon Group, video-centric smart IoT solutions and services provider Dahua Technology, Shenzhen-listed intelligent equipment and optical communication devices ZhongJi InnoLight, and Zhebao Media, which specializes in building internet news and digital entertainment platforms, among others.
Winreal Investment is gathering capital for the fund as the global 5G market is projected to reach $277 billion by 2025 with a compound annual growth rate (CAGR) of 111 per cent between 2019 and 2025, according to ResearchAndMarkets.com.
5G connections worldwide will hit 1.2 billion by 2025, or 14 per cent of total connections, per the GSMA Association. Crucially, one-third of the 1.2 billion 5G users will be in China, amid a government push behind the new technology that enables lightning-fast wireless connections, reduced latency, and massive capacity.
Beijing launched the commercial 5G network in November 2019, after initial commercial 5G mobile services had already been rolled out in other countries like the United States, Australia, Britain, and South Korea. The authorities pledged to install over 50,000 5G base stations across 50 cities including Beijing, Shanghai, Guangzhou, and Hangzhou by the end of 2019.
Established in June 2015, Winreal Investment primarily makes investments in companies that can help promote “the digital revolution of industries,” shows the company website. It backs startups in the fields of telecommunications, big data, AI and semiconductor, whose technologies can disrupt the education, automotive, intelligent manufacturing, and public security industries.
Some of its portfolio companies include Beijing-based big data solutions provider MiningLamp, third-party advertising technology developer Miaozhen Systems, semiconductor firm Lante Optics, and kid coding education brand Xiaomawang.