State-owned telecommunication giant China Mobile Ltd. has announced it is considering setting up a 1 billion yuan ($142 million) venture capital fund to invest in early-stage startups.
The company has invested 180 billion yuan ($25.6 billion) into 40 ventures since 2003, a company executive said, contributing about 10% of the firm’s total profit over the same period.
The majority of the investments – 136 billion yuan – were made directly by China Mobile in cash, with the remainder made through third-party investment firms, said Yuan Lihua, vice president of China Mobile Investment Holdings Co. Ltd., the investment arm of China Mobile. Yuan revealed the information at an annual company conference in Beijing on Thursday.
China Mobile Investment was established in 2016 as an independent entity to take charge of the state-owned group’s investment activity and manage its portfolios. However, China Mobile has also made its own outside investments, especially to tech companies in its industrial chain.
China Mobile’s investment portfolios cover a broad range of sectors including telecom, finance, cloud computing and the Internet of Things. Notable examples of firms it has invested in include smartphone manufacturer Xiaomi Corp., state-owned wireless infrastructure operator China Tower Corp., and voice recognition specialist iFlytek Co. Ltd.
Instead of a controlling stake, China Mobile typically took a minority stake in most of the firms it invested, a strategy which Yuan called is aiming to expand the company’s business partners.
“In certain sectors, China Mobile is relatively weak,” said Yuan. “Through investment, China Mobile can build a circle of ‘friends’ and join forces to build a stronger industry.” Yuan added that China Mobile is targeting companies whose vision is aligned with its own.
China Mobile, one of China’s three major state-owned telecommunication firms, posted profits of 81.8 billion yuan for the first three quarters on revenue of 81.8 billion yuan, down by 13.9% and 0.2% respectively, according to its latest earnings report.
Contact reporter Mo Yelin (yelinmo@caixin.com)
