SoftBank is planning a major investment in Ping An assets

BI Intelligence

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Japanese technology behemoth SoftBank is considering investments in three companies owned by Ping An, China's largest online insurer, according to sources interviewed by Bloomberg.

The investments would be made through its $97 billion Vision Fund, and SoftBank would take a stake of 5-10% in each company.

However, SoftBank's selections aren't final, as it's still conducting due diligence on the size and timing of the investments, the sources added. Ping An and SoftBank haven't confirmed the news.

If the reports are correct, SoftBank has selected highly successful targets to invest in:

• Lufax is China's second-largest marketplace lender, and as of July 2017, had originated some 200,000 loans worth over $2.5 billion since its 2011 launch. Moreover, the company is valued at $18.5 billion. The lender is now gearing up for a Hong Kong IPO with help from four major banks — Citigroup, JPMorgan, Morgan Stanley, and CITIC Securities — which analysts say could fetch as much as $5 billion.
• OneConnect, a cloud platform for financial institutions (FIs), already supplies its services — including banking and online lending capabilities — to around 400 banks, 20 large insurers, and 2,000 nonbank insurers, according to a study cited by Bloomberg. The company further upped its appeal to such clients in May 2017 when it launched a "self-service platform" with capabilities including data analytics, which by September 2017 had amassed over 100 new FI clients for the firm.
• Good Doctor, an immensely popular online health portal, gives users access to free health checks and diagnoses, as well as the ability to book medical appointments online. The portal has 500,000 active daily users, according to China Money Network. The company raised $500 million in May 2016, earning a valuation of $3 billion, Bloomberg Quint reports. Recently, it emerged that Good Doctor is working on plans for a Hong Kong IPO with major banks including Citigroup and JPMorgan, which could raise at least $1 billion, says Reuters.

This development indicates that corporate investment is paying off handsomely for China's tech giants. That three of Ping An's portfolio companies have won the attention and confidence of one of the world's most powerful technology investors suggests that corporate investment is a worthwhile strategy for Chinese technology giants to pursue, as it seems likely to deliver healthy returns.

Moreover, given that the three companies SoftBank is looking at stand to gain major funding boosts and an influential endorsement, and as such, further benefit Ping An, we’re likely to see China’s behemoths expanding their investment funds further, or launching ones if they haven't already, to maximize their returns and market reach.

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