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TPG puts $1 billion behind $1.9 billion Baidu fintech spinoff

ImpactAlpha, May 1 – Chinese internet giant Baidu is spinning off its financial services unit in “one of the biggest-ever private equity deals in China.” Baidu’s financial services group, which will soon have a loan book of $8 billion, lends to individuals and small businesses, using web searches and mobile habits to assess credit-worthiness. A trio of TPG funds, including its $2 billion Rise Fund, are investing $1 billion for a 26% share. The other $900 million comes from The Carlyle Group, Beijing-based Taikang Insurance, Agricultural Bank of China International and other investors. Baidu will retain a 42% stake.

  • Is this impact?… Lack of standardized credit scoring and reporting has limited access to credit and debt for low- and middle-income Chinese. “The Rise Fund has analyzed the social impact of Baidu FSG’s lending to customers with limited access to credit and to education loans,” the firm said in a statement. Baidu is a part of the World Bank’s Universal Financial Access 2020 initiative.
  • TPG in Asia… The deal is the Rise Fund’s first China-based investment and the first for Chang Sun, the former Warburg Pincus executive who joined TPG as managing partner in China last year.

The business is being renamed Du Xiaoman and will strike partnerships with Baidu. Baidu has spun off food delivery, video streaming and other units to focus on artificial intelligence products and services.

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