Hony Capital, a private equity firm owned by Chinese investment company Legend Holdings, has inked an agreement to invest RMB300 million ($42.22 million) in Xinhua Xuanwen, a mobile news platform launched by Chinese state-owned Xinhua News Agency.
Hony Capital did not disclose how many shares it will hold in Xinhua Xuanwen post the transaction, according to a recent company statement.
However, AVCJ reported that the investment will make Hony Capital a minority shareholder in Xinhua Xuanwen with 20 per cent stake ownership. Xinhua Net, the online distribution channel of Xinhua News Agency and the parent company of Xinhua Xuanwen, will retain the rest.
“Mobile internet has become the main channel of information dissemination. As the strategic forefront of Xinhua’s layout in the mobile internet field, Xinhua Net has garnered a certain number of royal users in the past seven years,” said Tian Shubin, chairman, and president of Xinhua Net, at a signing ceremony last week.
Xinhua Xuanwen, launched by Xinhua Net in 2012, has recorded 130 million downloads in the past seven years.
Upon the completion of the deal, Xinhua Net aims to build “a distinctive mobile platform for value dissemination” by equipping the portal with more videos, knowledge, and intelligent services, according to the statement.
“In an era of the fast-changing mobile internet and ever-growing demand for information consumption, the future development of China will require the presence of a quality news platform. Such a platform should be a mainstream authoritative outlet that is responsible, dignified, and always bear in mind the overall interests,” said Zhao Linghuan, chairman and president of Hony Capital.
The Chinese private equity company said that it also financed the construction of Chinese privately-run media outlet Jiemian.com and Jinri Toutiao, an artificial intelligence (AI)-enabled product introduced by ByteDance.
Hony Capital, founded in 2003, backs startups in a wide range of fields including pharmaceuticals and healthcare, consumer products, catering, media and entertainment, environmental protection and new energy, as well as machinery and equipment manufacturing.
With $12 billion assets under management (AUM), Hony Capital has invested in companies like Chinese retail giant Suning, American co-working unicorn WeWork, and China International Marine Containers (CIMC).