China's Xiaomi, Kingsoft back IP investment fund

Xiaomi will put in RMB30 million, while Kingsoft will contribute RMB10 million via its wholly-owned subsidiary Chengdu Interactive Entertainment, the Hong Kong-listed company said in a filing. A further RMB10 million will come from Beijing Zhigu Technology Consulting Services, which will also serve as fund manager, with the balance to be raised from other investors.

The fund will be known as Beijing Ruichuang Investment Management Center. Kingsoft said that, as a "strategic investment limited partner," it would receive permanent licensing rights to intellectual properties held by the vehicle; leasing rights on patents held by the fund and right of first refusal to purchase these patents on exit; and unspecified research and development rights.

Beijing Zhigu has ties to Lei Jun, a Chinese super angel investor who co-founded Xiaomi and, before that, was a co-founder and CEO of Kingsoft. He retains a financial interest in Kingsoft and serves as non-executive director and chairman of the board.

Xiaomi has previously invested in at least two businesses controlled by Kingsoft - game developer Westhouse Group and cloud computing venture Kingsoft Cloud. Last week, the two companies teamed up with Temasek Holdings to commit $296 million to 21Vianet, a Chinese internet data center provider.

Lei also co-founded venture capital firm Shunwei Capital Partners, which closed its second fund earlier this this year at $525 million.

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• Topics
• Fundraising
• Technology
• Greater China
• Technology
• China
• Fundraising
• Xiaomi