Bloomberg
Foxconn Technology Group and venture firm IDG Capital are seeking to raise a 10 billion yuan ($1.5 billion) fund to seed startups in automotive technologies from self-driving AI to battery development, according to a presentation for investors.
Foxconn and IDG initiated talks with government-backed funds, financial institutions and financiers several months back, according to a document presented to potential investors seen by Bloomberg. Under their plan, the iPhone assembler and IDG will put in 10 percent of the money to be raised, while both firms will delegate executives with experience in everything from robotics to acquisitions to run the fund. The funding effort remains underway, people familiar with the matter said, asking to not be identified as the matter is private.
Foxconn, Apple Inc.’s main global manufacturing partner, has invested in auto-tech startups such as Future Mobility and Chairman Terry Gou’s talked about the need to establish a presence beyond its staple business of making electronics. The new fund would represent its most aggressive initiative to stake out a spot in the burgeoning market for car technology—especially in China, which foresees both electric and autonomous vehicles plying its roads within years. Their presentation also laid out promising targets in Japan and the US.
Representatives for Foxconn and IDG declined to comment.
Chinese internet giants from ride-hailing giant Didi Chuxing to Alibaba Group Holding Ltd. are also getting in on the act, keen to grab a slice of the future market for services and systems, from in-car apps to smart devices that take voice commands in-transit. Baidu Inc., which is racing to get its self-driving cars onto roads by 2021, aims also to amass a 10 billion yuan fund to invest in self-driving projects over the next three years and quicken the development of its nascent Apollo platform. “Our fund will encompass early and mature stage
financing, combining VC and PE models,†Foxconn and IDG said in their presentation.
Beyond robot cars, China has identified new-energy vehicles as a strategic emerging industry and aims to boost annual sales of plug-in hybrids and fully electric cars 10-fold in the next decade. Government support helped the country surpass the US in 2015 to become the world’s biggest market for such autos.
While Foxconn is teaming
with IDG, one of China’s most active startup financiers, Baidu
has secured government-backed Yangtze River Industry Fund as a partner. In their presentation, IDG and Foxconn put forth examples of potential investment targets.