China's Sinovation launches AI-focused fund

In addition to the Sinovation Ventures Smart Investment Fund – which will target AI and related areas such as big data, education, consumption upgrades, and enterprise services – the venture capital firm will establish an AI research institute and a local branch of Chuangxin Qizhi, its business services unit that helps corporate partners with digitization.

All three entities will be based in Guangzhou Development District, one of China’s first national economic and technological development zones. The government wants this to be an AI hub for the Greater Bay Area, which covers Hong Kong, Macau, and the cities in Guangdong’s Pearl River Delta.

Ning Tao, a partner at Sinovation, said in a statement that the objective is to build a complete AI ecosystem that harnesses the top talent and facilitates the creation of valuable intellectual property. These technology solutions will be applied to new retail, financial services, healthcare, and smart city initiatives.

Specific goals include: using AI technology to improve the efficiency and quality of public services and accelerate industrial development; helping local companies become more innovative and internationally competitive through the incorporation of AI; and supporting AI-focused start-ups with a view to creating clusters of interrelated businesses.

Founded in 2009 as Innovation Works, Sinovation manages more than $1.7 billion across six funds, including four US dollar-denominated vehicles and two renminbi vehicles. The firm closed its latest US dollar fund at $500 million last month. The second renminbi vehicle closed at RMB2.5 billion in 2016 in conjunction with a final close for the third US dollar fund at $300 million.

Sinovation makes early and growth-stage investments – typically Series A to C rounds – in Chinese companies, with a small allocation for overseas deals. AI is expected to feature prominently in the latest US dollar fund, following the establishment of an AI ecosystem development program in 2016.

In March, the firm set up Chuangxin Qizhi as a standalone business that focuses on developing AI-related products. The aim is to help corporates realize greater efficiencies through the application of AI to their existing businesses. Members of the founding team have previously worked for the likes of Google, Microsoft, Baidu, and SAP. Chuangxin Qizhi has received over RMB100 million in angel funding.

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• Topics
• Greater China
• Venture
• Technology
• Fundraising
• Renminbi fund
• Sinovation Ventures
• artificial intelligence
• TMT
• China