SoftBank Vision Fund forms JV with Chinese insurer Zhong An
SoftBank Vision Fund has entered into a technology development joint venture (JV) with Zhong An, a PE-backed Chinese insurance company. It will see each party contribute $100 million.
According to a filing, SoftBank Vision Fund will take a 51% interest in the JV, while Zhong An will hold the remaining 49%. The partnership aims to grow Zhong An's technology development business outside of China.
Zhong An's technology business has recently expanded to encompass artificial intelligence, blockchain, internet-of-things, cloud computing, and medical services. It invested RMB373.5 million ($55.1 million) into tech R&D in the first half of 2018.
Shares in the Hong Kong-listed company have traded lower since announcement of the JV. The stock was trading at HK$35.20 as of mid-morning August 29, about 7.4% lower than the previous day's close. Shareholders include Alibaba Group, Tencent Holdings and Ping An Insurance, as well as Morgan Stanley and China International Capital Corp (CICC).
Zhong An was founded in 2013 by a group including Alibaba's financial services affiliate Ant Financial, Tencent, and Ping An. Jack Ma and Pony Ma, the founders of Alibaba and Tencent, and Mingzhe Ma, chairman of Ping An, are credited as the driving forces behind the business.
The company raised about HK$11.9 billion ($1.6 billion) in an IPO last year that saw SoftBank Group participate as a cornerstone investor, covering 36% of the offer – or 71.9 million shares – and taking a 4.99% stake. Ant Financial is currently among the largest shareholders with a 13.5% stake.
A group of pre-IPO investors including Morgan Stanley, CICC, a wealth management platform operated by CDH Investments, Keywise Capital Management, and a fund called Equine Forces invested a combined RMB5.78 billion in the company in 2015. Other backers include SAIF Partners.
Gross written premiums came to RMB5.1 billion in the first half of 2018, up from RMB2.5 billion the previous year, while net premiums rose from RMB2 billion to RMB4.1 billion over the same period. Zhong An posted a net loss of RMB9666.8 million during the first half of 2018, compared to a loss of RMB286.8 million in the prior corresponding period.
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