TPG leads US$1.9 billion round of financing in Baidu financial services group
Beijing, Hong Kong, San Francisco and Fort Worth - April 28, 2018 –TPG, a global alternative asset firm, today announced that it has led a consortium of investors in providing US$1.9 billion of financing to the spinoff of Baidu financial services group (“Baidu FSG”, to be rebranded as Du Xiao Man) from its parent company Baidu Inc. (NASDAQ:BIDU), the leading Chinese language Internet search provider. TPG and its co-investors will together invest approximately US$1 billion in the deal. The transaction, which is expected to close in 2-3 months, is subject to customary closing conditions, including regulatory approval and completion of reorganization.
Launched in 2015, Baidu FSG is one of China’s fastest-growing consumer lending and wealth management platforms. Leveraging the vast user data of its parent company, Baidu FSG develops its proprietary analytics and offers customers with a wide range of financing and investment products targeted to their specific needs. Since inception, Baidu FSG has been building up its financing business to a loan balance of RMB28 billion at the end of 2017, and expanding financial inclusion across China.
“As savings and lending activities move online, technology companies are able to use their big data analytics to offer flexible micro-financing to the younger generation of consumers,” said Mr. Chang Sun, TPG Managing Partner, China. “Baidu financial services group is using technology and advanced analytics to capture on this exciting growth opportunity. The company also uses big data analytics to conduct risk assessments for its customers, including those who have limited access to traditional financing. We are pleased to invest behind the platform’s exciting growth.”
TPG takes a thematic approach to sourcing investment opportunities that empowers its teams to work across geographies, sectors and deal types. This investment is a great example of the TPG’s multi-platform strategy, in which its three platforms, TPG Capital Asia, TPG Growth and The Rise Fund – the firm’s global social impact fund – co-invested in the deal.
This transaction also marks The Rise Fund’s first investment in China. The $2 billion global social impact fund focuses on investments in seven sectors – including financial services – in which independent research has shown that impact is both achievable and measurable in quantitative terms. The Rise Fund has analyzed the social impact of Baidu FSG’s lending to customers with limited access to credit and to education loans, as it is a member of Universal Financial Access 2020, a World Bank initiative to expand access globally through microfinance.
Across platforms, TPG has significant experience investing in some of today's most dynamic companies, including Airbnb, McAfee, Nio, Spotify, Mobike, and Uber. The firm also has a long track record of partnering with innovative financial services companies in Asia. Select investments included BTPN, China International Capital Corporation (CICC), Shenzhen Development Bank, and Union Bank of Colombo.
TPG is a leading global alternative asset firm founded in 1992 with more than $82 billion of assets under management and offices in Austin, Beijing, Boston, Dallas, Fort Worth, Hong Kong, Houston, London, Luxembourg, Melbourne, Moscow, Mumbai, New York, San Francisco, Seoul, and Singapore. TPG's investment platforms are across a wide range of asset classes, including private equity, growth venture, real estate, credit, and public equity. TPG aims to build dynamic products and options for its investors while also instituting discipline and operational excellence across the investment strategy and performance of its portfolio. For more information, visit www.tpg.com.