BBVA to invest $50m into Chinese venture capital fund
BBVA will invest $50 million into Sinovation Fund IV, a Chinese venture capital fund run by Sinovation Ventures, and with a special focus on artificial intelligence (AI).
Sinovation Ventures is led by Dr. Kai-Fu Lee, former president of Google China, and “one of the most recognised global experts in AI”.
In total, the fund has about $500 million to invest in firms at the early stages in areas such as internet consumption, B2B, education – but AI will be the focus.
BBVA’s CEO Carlos Torres Vila says: “By investing into the Sinovation Fund IV, we are ensuring we can learn from and build connections with some of the most promising AI solutions being built anywhere on the planet. Just as importantly, we can do it via a high-performing investment platform with a strong return profile.”
The Spanish bank says the investment will give it insight and access to the growing Chinese innovation market, especially around AI.
From a financial perspective, BBVA explains that it will offer the opportunity to understand and potentially co-invest into Chinese AI start-ups.
Sinovation Ventures began operations in 2009 and currently manages six funds, with total assets under management over $1.7 billion. As its name indicates, its investments are mainly focused on China.
Plagiarism is past?
Naturally, BBVA makes a huge deal about China – saying it is “one of the most active markets in the field of innovation and is the leading country in international patent applications”.
This is a marked change from all the stories that many of us will have read over the years on Chinese plagiarism and intellectual property theft.
According to the bank, the nation has more than one billion smartphone subscribers and an annual growth of 12% year-on-year; and the country is “also a leader in the implementation of technologies such as mobile payments”.
In turn, the size of the Chinese internet market creates a lot of user data, “which in turn has fed the fast-paced development of AI solutions in the market”.
BBVA cites local tech giants such as Alibaba and WeChat Tencent that have grown to “huge scales in a short period of time”.
China has also invested “heavily” in programmes to promote the development of AI solutions, including government-backed programmes and support from universities and the nation’s tech companies.
Incidentally, earlier this month, we did a case study on BBVA and its progress and innovation within the digital banking arena.