Bertelsmann Investments, the venture capital (VC) arm of German media group Bertelsmann, is reportedly looking to invest $700 million in Chinese startups over the next 3-5 years despite widespread concerns among Western investors over the country’s slowing economy and its political tensions with the US.
Carsten Coesfeld, chief executive of Bertelsmann Investments, told the Financial Times that the firm will back tech groups in China and startups founded by Chinese entrepreneurs abroad, alongside co-investors including large financial institutions and sovereign wealth funds.
Coesfeld said that on a visit to China he was struck by the country’s “very impressive” entrepreneurial talent and that there was “sometimes a bit of a disconnect” between the Western media portrayal of China’s struggle to return to growth since the pandemic and reality.
Bertelsmann Investments is part of the German family-run conglomerate Bertelsmann, which owns businesses such as entertainment group RTL Group, music label BMG, and Penguin Random House, the world’s largest book publisher.
Since its inception in 2006, Bertelsmann Investments has invested about 1.7 billion euros ($1.9 billion) in over 400 companies and funds worldwide, according to its official website.
The firm runs subdivisions including Bertelsmann Asia Investments (BAI), Bertelsmann India Investments (BII), and Bertelsmann Digital Media Investments (BDMI) funds, as well as selected fund and direct holdings in markets like Europe, the US, Brazil, Southeast Asia, and Africa.
Its China-focused branch Bertelsmann Asia Investments, now known as BAI Capital, has invested in more than 200 internet companies since its establishment in 2008, including 40-plus unicorns and 18 initial public offerings (IPOs) under its belt.
BAI Capital’s portfolio includes China’s biggest online fitness app Keep; Stori, a provider of digital financial services in Latin America; and Bigo Live, a live-streaming platform incubated by Nasdaq-listed Chinese video-based social media platform Joyy Inc for the Southeast Asian and US markets. Its focused industries span retail, media and content innovation, industrial tech, software, fintech, consumer brands and services.