JD Finance Establishes Early Stage Consumer VC Fund Qianshu Capital

Chinese e-commerce giant JD.com Inc.’s financial services spin-out, JD Finance, has set up its first consumer-focused early stage venture fund, Qianshu Capital, to back innovative start-ups that help meet increasing consumer demand in China.

No financial details were disclosed. The new fund will make angel and series A round investments by acquiring a minority stake in promising start-ups, according to a company announcement.

So far, Qianshu Capital has made investments in lifestyle technology, personal health, fashion and cosmetics, entertainment and media sectors. Its portfolio companies include mattress maker 8H, radio manufacturer AirSmart, suitcase developer Runmi Technology and towel design firm Zuishenghuo.

Qianshu Capital has developed a system to optimize its investment strategy based on big data, the company says. The system automatically analyzes a start-ups’ business plan and compares it with its peers. After applying JD Finance’s crowdfunding product testing results, it will help the fund make better investment decisions.

With JD Finance’s start-up service system, Qianshu Capital will provide a number of post investment services such as training, consulting and financial services to its portfolio companies. JD Finance’s communication platform connects start-up founders and successful entrepreneurs. JD.com and JD Finance’s crowdfunding channel will help start-ups reach their targeted audience and conduct crowdfunding campaigns. JD Finance’s supply chain finance and agriculture finance units will support companies’ development with capital and resources.

JD.com established JD Finance in 2013 to provide consumer credit, supply chain financial services, crowdfunding, wealth management, insurance agency and third-party payment services. This March, JD.com agreed to divest all its shares in its financial services arm JD Finance for around RMB14.3 billion (US$2.1 billion), as the unit plans for a domestic initial public offering.

It was reported at the time that JD Finance was in the process of raising a fresh round of capital at a RMB50 billion valuation, but it’s unclear if that round has closed. In January 2016, JD Finance raised RMB6.65 billion (US$1 billion) from investors including Sequoia Capital China, China Harvest Investments and China Taiping Insurance at RMB46.65 billion (US$7 billion) on a fully-diluted, post-investment basis.

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