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Billionaire-owned Chinese companies targeting Indian startups

New high-tech companies from China spurring Indian growth and investment

Billionaire-owned Chinese companies, Baidu, Alibaba and Tencent (collectively known as BAT) are stepping up to the plate to fund Indian startups – filling the gap left by domestic venture capital firms which have scaled back their investments in fledging tech businesses. What was a bubble of sorts is beginning to settle down, and China, the world’s largest country and one of the friendliest for foreign investment, is now turning the situation around investing in emerging economies on their own.

$4 billion in Indian investment

Venture capital firms pumped a record US$4 billion into Indian start-ups between January and September of 2015, but the deals are becoming fewer and smaller, with investments dropping from 43 deals worth US$604 million in July to 30 deals worth US$255 million in September. Incidentally, India is the last big frontier for the global mobile Internet and BAT’s investment experience and expertise is expected play a significant role in shaping the development of the sector.

So far, the Alibaba Group, China's largest e-commerce firm which has the sharpest focus on India, has invested close to US$1 billion in Indian start-ups, including US$680 million in Noida-based online retailer Paytm and US$100 million to US$125 million in Snapdeal, India's second largest online marketplace by sales.

Tencent, which owns the mobile app WeChat has invested in the online healthcare startup Practo as part of a US$90 million funding round, while Baidu, China's largest internet search company, is in talks to invest in Mydala, an online coupon and discount marketing firm.

E-commerce investment and more

It is anticipated that each of the BAT firms will likely invest in sectors that are close to their core operations - commerce and wallets for Alibaba, social and mobile consumer for Tencent, and mobile consumer and commerce for Baidu. However, some believe e-commerce will not be the only area in which the three firms will invest and expect that they might also find travel, real estate and education attractive. As strategic investors, Baidu, Alibaba and Tencent are expected to take a majority stake in the firms in which they invest and play an important role in their management.

The Excel Billionaires Leaders Fund is well positioned to benefit from the growth of BAT as the fund has exposure to all three firms. Our expertise in emerging markets, especially the burgeoning economies in Asia are what sets us apart from the rest. Take advantage of our hands-on experience in these markets, and invest with us today.

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