Chinese Internet giant Baidu Inc has announced that will sell off a majority stake in its Baidu Financial Services Group ( Baidu FSG) for approximately USD$1.9 billion, in order to help fund its fintech ambitions.
A consortium that includes TPG Capital Management LP, Carlyle Group, Taikang Group and ABC International Holdings will buy up the majority stake, leaving Baidu with approximately 42% in Baidu FSG, which will be renamed Du Xiaoman Financial.
Baidu FSG was launched in 2015, and runs the Baidu Wallet payments platform as well as an online credit service and online wealth management platform. As of the end of 2017 Baidu FSG’s loan balance was 28 billion yuan.
Guang Zhu, senior vice president at Baidu, will become chief executive of Du Xiaoman in the wake of the deal, which is expected to come to fruition within the next several months.
Baidu hopes that the sale will help it to catch up to online rivals Alibaba and Tencent in China’s highly competitive fintech space, as well as diversify its revenue sources beyond its flagship internet search engine.
Baidu also hopes that its artificial intelligence R&D capabilities will give it an edge in China’s burgeoning fintech sector.
“In the coming age of FinTech, Du Xiaoman will leverage the technological capabilities of Baidu AI to partner with financial institutions and provide technology-driven, trustworthy financial services to consumers in China,” said Guang Zhu.