Baidu partners with CITIC and looks for $1 billion to build an online bank
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Baidu partners with CITIC and looks for $1 billion to build an online bank

Baidu has an eye on the fintech world. The Chinese search engine giant started working with Chinese mid-size lender CITIC Bank in 2015 to create AiBank, an online lender that “provides personal loans of as much as 300,000 yuan without requiring collateral” according to its website. Now, the partnership is looking for $1 billion to drive AiBank to new, greater heights, according to anonymous people with knowledge of the matter.

As the China/US trade war weighs on markets, Baidu’s share price is down 4% over the last 5 days

Baidu June 3

Source: Yahoo Finance

The people in question declined to give more details – partly because this is a private funding round, and partly because the details are still subject to change. However, they did say that the matter should be complete within a few months. In an email to Reuters, AiBank said that it “has nothing further to disclose.”

AiBank is one member of the fintech revolution that’s reimagining China’s banking world. As traditional lenders downsize in response to these new players, who leverage a combination of technical agility and the power innate to the deep pockets that come from major corporate backers, ventures like this one continue to grow.

However, Baidu is not alone in the market by any means. While traditional lenders are competition of a type, AiBank is also facing off rivals like Ant Financial, an Alibaba affiliate. As more and more banking transactions take place outside brick-and-mortar branches in China, this is a market that the big names are eager to dominate.

Few companies understand this better than Baidu. In 2017, speaking to reporters, the company’s chief operating officer, Qi Lu, said: “AiBank is the future of intelligent finance … It is an institution that understands customers best and understands finance best.”

Disclosure

Dominion holds Baidu in its Global Trends Managed Fund.


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