Chinese internet giant Tencent has struck a deal with GAC Group for a mobility joint venture. GAC is a car maker which is owned by the Guangzhou municipal government of Guangzhou along with Guangzhou Public Transport Group.
As per the details, the new entity will have $149 million (RMB 1 billion) infused by the involved parties where GAC will have a 35% stake and Tencent will have a 25% stake. The remaining stakes will be owned by Guangzhou Public Transport Group along with other small backers. The details of the deal have come out after GAC filing to the government.
Interestingly, both the firms have been working together since 2017 when they had joined hands to work on internet-connected cars and smart driving. GAC utilized the expertise of Tencent’s mobile payments, social networking, big data, and cloud services.
Notably, the deal comes on the back of Didi Chuxing, the ride-hailing company which owns the Chinese business of Uber announced a partnership with BAIC, another state-owned automobile company for a new energy vehicle and artificial intelligence. Baidu, the Chinese search engine company is also working with state-owned Honggi to test out their autonomous driving software. Alibaba, the e-commerce giant can never be left behind and is working with SAIC to develop a smart Sedan.
Tencent is famous for their instant messenger platform WeChat. The firm restructured themselves last year in order to focus on enterprise-facing services. Tencent's some of the notable investments include India's food tech unicorn Swiggy, Indonesian ride-hailing unicorn Go-Jek. It had recently infused money in AutoAI, another Chinese company which is working on the self-driving cars.
Image Courtesy : fortune