Foxconn, IDG seeking US$1.5 billion for car tech fund to back start-ups

Foxconn Technology Group and venture firm IDG Capital are seeking to raise a 10 billion yuan (US$1.5 billion) fund to seed start-ups in automotive technologies from self-driving AI to battery development, according to a presentation for investors.

Foxconn and IDG initiated talks with government-backed funds, financial institutions and financiers several months back, according to a document presented to potential investors seen by Bloomberg. Under their plan, the iPhone assembler and IDG will put in 10 per cent of the money to be raised, while both firms will delegate executives with experience in everything from robotics to acquisitions to run the fund. The funding effort remains underway, people familiar with the matter said.

Foxconn, Apple’s main global manufacturing partner, has invested in car-tech start-ups such as Future Mobility and chairman Terry Gou has talked about the need to establish a presence beyond its staple business of making electronics. The new fund would represent its most aggressive initiative to stake out a spot in the burgeoning market for car technology – especially in China, which foresees both electric and autonomous vehicles plying its roads within years. Their presentation also laid out promising targets in Japan and the US.

Representatives for Foxconn and IDG declined to comment. 

Chinese internet firms from ride-hailing giant Didi Chuxing to Alibaba Group are also getting in on the act, keen to grab a slice of the future market for services and systems, from in-car apps to smart devices that take voice commands in-transit. Baidu, which is racing to get its self-driving cars onto roads by 2021, aims also to amass a 10 billion yuan fund to invest in self-driving projects over the next three years and quicken the development of its nascent Apollo platform.