Baidu, the Chinese search engine company, is looking to raise money for its finance unit, Baidu Financial Services Group (FSG), and could secure as much as $2 billion.
Citing people with knowledge of the matter, CNBC reported news that investors will either purchase shares of Baidu Financial Services Group or purchase new stakes in the wholly owned unit of Baidu. The unit is valued at $2.8 billion ahead of the round of financing.
CNBC noted that the Chinese internet search giant is currently in talks with potential investors and is hoping to raise $1.5 billion to $2 billion. Close to 50 percent of the proceeds will be raised by the company, lowering its stake in the unit. Fundraising is slated to close in April.
The financial unit is responsible for Baidu Wallet — its digital payment platform — an internet-based credit and an online wealth management service. By raising more money to invest in that arm of its business, Baidu is trying to close the gap on its Chinese rivals, Alibaba and Tencent. Some of the proceeds from the round of funding are expected to be used for an investment in domestic financial institutions, including trust firms.
News of a potential fundraising round comes as the company is pushing into new markets, including innovative technology like self-driving cars. Earlier this month, Baidu inked a partnership with BlackBerry, the Canadian maker of mobile devices, to further development of self-driving tech. Through the collaboration, BlackBerry’s QNX infotainment software will serve as the basis for Baidu’s Apollo self-driving platform. The project, named after NASA’s lunar landing program, consists of cloud services, an open software stack, reference hardware and vehicle platforms.
A number of leading automakers and tech companies — such as Microsoft, Nvidia and Intel — have already signed up for Baidu’s Apollo platform. Notably, it has attracted over 1,700 domestic and international partners, including Daimler, Ford and Intel.