Hony invests $42m in Xinhua News Agency’s mobile platform

Xinhua Yuanwen was established in 2018 as a wholly-owned subsidiary of Xinhua Net, the online distribution channel of the Xinhua News. Xinhua Net will retain an 80% stake in the business, according to a filing.

The mobile platform, which launched in 2012, targets a youth audience with content including short videos and podcasts. It claims to have achieved 130 million downloads. Xinhua Xuanwen serves as a technology developer as well as a content distributor. Revenue came to RMB141,500 in 2018 with a net loss of RMB1.4 million. For the first half of 2019, the net loss was RMB1.5 million.

Hony is expected to contribute industry expertise, strategic planning input, and cross-border capabilities in addition to capital, said Shu Tian, chairman of Xinhua Net. The private equity firm has previously invested in the likes of Jiemian, a news media start-up launched by Shanghai United Media Group, China's largest newspaper group. Its portfolio also includes ByteDance Technology, a news aggregation and short video platform valued at $75 billion.

Hony has more than RMB80 billion in assets under management. The firm's latest flagship fund closed at $2.7 billion in 2016, comprising US dollar and renminbi tranches.

Xinhua News is the biggest media organization in China and the sole official distribution channel for information relating to the government and the Communist Party. Shanghai-listed Xinhua Net relies on online advertising for most of its revenue. While revenue reached RMB598 million in the first half, up 1% year-on-year, net profit fell 48% to RMB40 million due to rising costs.

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• Topics
• Greater China
• Media
• Early-stage
• Technology
• Hony Capital
• TMT