Fidelity unit sets up fund for smart tech

Eight Roads Ventures, the proprietary investment arm of Fidelity International Ltd, announced the launch of its dedicated technology fund for China on Tuesday.

With a size of $275 million, the fund will invest in companies based in China and cross-border deals, mainly focusing on enterprise technology, fintech and consumer technology.

The fund will look for investment opportunities in areas including big data, artificial intelligence, information security, the Internet of Things, blockchain, social commerce and consumption upgrade. It will offer enterprise tech and fintech support for companies in the early stage and consumer tech support for those in the growth stage.

"The launch of a specialized China technology fund reflects the country's fast emergence as a global leader in technology, as well as its growing maturity and the opportunities that come with it," said Jarlon Tsang, managing partner at Eight Roads Ventures Asia.

"Advances in automation, enterprise solutions, fintech, data, artificial intelligence, analytics, storage and the like continue to require investment capital that brings with it a deep understanding of the local environment and extensive footprints and access to local networks. It is Eight Roads' intention to stay at the forefront of this reality and this opportunity," Tsang added.

Information technology is undergoing a revolution amid the transition from the age of the internet to the age of data. This will bring even bigger opportunities compared to the previous revolution from the age of computing to the age of the internet, said Zhang Ju, investment director of Eight Roads, who specializes in enterprise technology investment.

In the next 10 years, companies' basic work flows will be driven by data, which will become key assets, and their core competence will lie in data technology. This new form of enterprise business will bring huge changes and opportunities to enterprise technology and also handsome returns on Eight Roads' investments, Zhang said.

"Because of its huge population, as well as the size and the level of activity of its economy, China is a major power in terms of data production and application. How to build a world-leading big data ecosystem based on a large amount of data is the biggest opportunity for all entrepreneurs, especially those in the field of enterprise technology, at this moment," he said.

"China has the potential to become a world leader in three areas supporting the development of artificial intelligence－data, computing capability and algorithms. Besides, as the market size for internet and information security is expected to see a 10-fold increase, many Chinese practitioners in these areas will take this opportunity to start their own business," he said.

Venture investment in fintech companies in China increased to $6.4 billion in 2016, up from $3.1 billion in 2015, said a report by KPMG, an international provider of audit, tax and advisory services.