What could be the impact on Fintech if the Chinese government decides to restrict outbound investments coming from Chinese investors?
The London-based neobank Tandem is having difficult times following House of Frasers’ decision to pull almost 83% of its initial investment, representing £29 million out of the £35 million.
In a statement, the Chinese group Sunpower which owns House of Fraser said that it has been forced by the Chinese government to stop its investment in Tandem. While its not new that the Chinese government imposes restrictions for local firms involved in offshore deals, it shows the government’s strategy to strenghen China’s leading position in Fintech by supporting in-house companies.
According to the consulting firm Accenture, “China and Hong Kong alone accounted for US$10.2 billion, or 91%, of Asia-Pacific’s $11.2 billion in fintech investments in 2016″.
Should the Global Fintech sector worry about tighter decisions imposed by the Chinese government? What are the existing deals initiated by Chinese VC funds that could be impacted by such restrictions?
It it interesting to remember the state of some key Fintech operations made by Chinese investors outside of China:
Cocoon networks
Cocoon networks is a Chinese-backed VC fund set to invest more than $700 million in UK and European tech start-ups with a main focus on Fintech.
Credit China Fintech
Credit China Fintech is a Hong Kong-based firm that launched an M&A fund with $1.44 billion under management, along with state-owned and private companies. The fund invested $30 million last January in the San Francisco-based Bitcoin company BitFury.
Huiyin Blockchain Venture
HBV is a Shanghai-based VC fund specialized in Bitcoin and Blockchain that has been created by the Chinese investment firm Huiyin Group, with $20 million under management. The fund invested in the San Francisco-based bitcoin company Ripio, the San Francisco-based Purse.io, the indian-based Unocoin, the Mexican-based Bitso, the US-based PopChest, the London-based SatoshiPay, the US-based Yours and the San Francisco-based Brave.
Circle
Circle is a London-based payment company that closed a Serie D round last June from six Chinese investors: Baidu, China Everbright Investment Management, China International Capital Corporation Alpha, CreditEase, IDG Capital Partners and Fenbushi Capital.
Fenbushi Capital
Fenbushi Capital is a Shanghai-based VC fund focused on building blockchain-enabled companies. The fund invested in the US-based Factom, the London-based Everledger, the US-based Zcash, the US-based Abra, the London-based Circle, the US-based Tierion, the US-based Gem and the US-based Symbiont.
IDG Capital Partners
IDG Capital Partners is a Beijing-based VC fund that has invested in many tech start-ups in China and abroad. More specifically, the fund invested in the London-based Circle and the San Francisco-based Ripple.
CreditEase
CreditEase is a Beijing-based VC fund that has $1 Billion under management. The fund is invested in London-based Circle, the US-based Trumid, the US-based WorldCover and the US-based Tradeshift.
