Chinese internet giant Baidu has set up an investment fund worth 20 billion yuan for mid- and late-stage start-ups, it announced on Wednesday.
The fund, called Baidu Capital, will make investments within a range of US$50 to US$100 million in internet companies.
Funding for Baidu Capital will come from several industry funds, securities companies and government-backed investment institutions, the company said.
It will be run by two or three managing partners from the investment industry, with a background in the internet sector and experience in private equity, Baidu said, although it stopped short of revealing any candidates.
The company also did not say whether it had already started making investments in start-ups.
This is the second investment venture set up by Baidu in recent months. In September, it announced the establishment of Baidu Venture, a US$200 million venture capital unit headed by chief executive Robin Li Yanhong to focus on projects in augmented and virtual reality.
The company joins fellow internet firms such as Tencent and Xiaomi in making investments in start-ups as a way of investing in new technologies and expanding its business offerings.
In Baidu’s most recent earnings report, the company posted a 34 per cent profit decline to 2.41 billion yuan in the second quarter, which it blamed on a modest 4 per cent growth in online marketing revenue. Its steepest profit decline in almost a decade also came after the company was embroiled in a healthcare advertising scandal in May, resulting in tighter regulations on internet advertisements, one of Baidu’s most lucrative businesses.