TPG, Carlyle lead over $1.9b round in Baidu’s newly spun-off finance arm

Photographer: Bloomberg

Baidu Inc. has raised more than $1.9 billion for its newly spun-off financial services division from TPG, Carlyle Group and other investors, creating one of China’s best-funded fintech companies.

Taikang Group and other backers also joined the funding round for the newly formed company, which will be called “Du Xiaoman Financial” and use artificial intelligence to provide short-term loans and investment services. Baidu Senior Vice President Zhu Guang will run the business as an independent entity, according to a statement Saturday. The news comes a day after Baidu said it planned to sell a majority stake in the business, without providing a timetable.

Baidu announced plans to spin off the unit in July, to help it obtain domestic financial services licenses and reduce drag on the parent, China’s most popular search engine. Moody’s Investors Service put the company’s credit rating under review last year over risks related to its loans business. E-commerce giant JD.com Inc. completed a similar spin-off in 2017.

“I am very pleased to see that the financial unit has graduated,” Baidu Chief Executive Officer Robin Li said in the statement. “This is another milestone for Baidu’s AI ecosystem after the listing of iQiyi.”

In its earnings release, Baidu said the financial services unit had assets of $7.5 billion and liabilities of $6.6 billion but added that there was no assurance of a sale.

Baidu has spent the past year selling or spinning off a series of costly business units to refocus on its core services. Its loss-making food delivery service Waimai was sold to a rival now controlled by Alibaba Group Holding Ltd. called Ele.me, while the Netflix-like streaming video service iQiyi Inc. listed this year.

The moves are designed to help sustain the business until big bets on artificial intelligence pay off. It’s hoping that AI products like autonomous vehicles and Siri-like personal assistants will be its next big source of revenue and profits. But while its open-sourced driverless car platform, named Apollo, now has over 100 partners, fully-autonomous passenger sedans aren’t expected for mass-production until at least 2020.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.