$1.5 billion sought for car technology startups
Foxconn, IDG teaming up to raise seed money
Foxconn Technology Group and venture firm IDG Capital are seeking to raise $1.5 billion to seed startups in automotive technologies from self-driving artificial intelligence 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, said people familiar with the situation, who asked not to be identified because the matter is private.
Foxconn, Apple’s main global manufacturing partner, has invested in auto-tech startups such as Future Mobility, and Chairman Terry Gou has 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 U.S.
Chinese internet giants from ride-hailing giant Didi Chuxing to Alibaba 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, which is racing to get its self-driving cars onto roads by 2021, aims also to amass a $1.5 billion 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 plugin hybrids and fully electric cars 10-fold in the next decade. Government support helped the country surpass the U.S. in 2015 to become the world’s biggest market for such autos.
“Foxconn regularly makes investments in new and emerging technologies in markets around the world,” the Taiwanese company said in a statement, declining to comment further. IDG declined to comment.
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, including Nio, the electric-car startup formerly known as Nextev that Bitauto founder William Li set up in 2014 to take on Tesla. Another was Sensetime Group, which in July raised $410 million in the largest single round for an artificial intelligence company to date.