(Adds details, context)
By Paul Carsten
BEIJING Oct 12 China's Baidu Inc said
on Wednesday it has established a 20 billion yuan ($3 billion)
investment fund, Baidu Capital, as the country's dominant search
engine seeks a way to remain relevant in the smartphone era and
Investments will focus on mid- and late-stage deals in the
internet sector, in Chinese yuan, U.S. dollars and other
currencies, with individual funding amounts ranging from $50
million to $100 million, the company said on its official WeChat
mobile messaging account.
For Baidu, the need to future-proof the company and hold
onto users by finding new technologies is becoming more
Not only have both the search giant's main rivals Tencent
Holdings Ltd and Alibaba Group Holding Ltd
fared better with mobile users in China, the world's biggest
smartphone market, but a post-smartphone era of artificial
intelligence, virtual reality and augmented reality could shake
up the technology sector again.
To address that possible future, Baidu announced last month
the creation of Baidu Venture, a $200 million fund to invest in
those three fields.
As for Baidu Capital, its money will come from large
insurance funds, securities companies and others, and investment
institutions with a state background have also expressed
interest in participating, the company said without naming any
The fund will have two or three managing partners, drawn
from the investment industry, with a background in the internet
sector and private equity, Baidu said, also without naming any
A Baidu spokeswoman declined to comment beyond the statement
In its latest earnings, Baidu posted its steepest-ever
quarterly profit decline and the slowest growth in revenue in
nearly eight years, hit by a healthcare scandal that ensnared
the company this year and saw regulators slap curbs on one of
its most lucrative advertising businesses: the medical sector.
Baidu expects its third-quarter revenue to range from a 1.9
percent fall to a 1.1 percent gain from the previous year.
($1 = 6.6685 Chinese yuan renminbi)
(Reporting by Paul Carsten; Editing by Stephen Coates and