Cathay Capital has held the first closing of its CarTech Fund, a new investment vehicle – and Cathay’s first RMB fund – to invest in the automotive and mobility ecosystem in China.
Launched with the support of cornerstone investors Valeo and Yangtze River Industry Fund, Cathay CarTech will rely on Cathay Capital’s global vision and unique platform to foster the development of innovative technologies and business models. The CarTech Fund will focus on China and invest a total of 1.5 billion yuan (~200 million euros) in the innovative companies within the next four years.
China is the world’s largest automotive market and is leading the new mobility sector, while pursuing a strategic roadmap in the three revolutions taking place in the automotive industry: electrification, autonomous and connected cars and digital mobility. The unique context of China’s urban transportation challenge, the high penetration rate of mobile internet, combined with the rapid and aggressive introduction of alternative mobility and sharing concepts, are compressing the time needed to commercialise smart, connected car technology and related services. The automotive and mobility industry is at the critical turning point and new business opportunities will appear in this rapidly growing sector.
The CarTech Fund will invest in high-potential companies focusing on core technologies for cars, enabling them to become indispensable parts of the self-driving car revolution and unlocking the new mobility ecosystem.
This new approach of serving innovation in a given industry and in a targeted geography through global vision and sector expertise, will bridge partnerships between leaders in the automotive industry and innovative players of this ecosystem. By providing a global platform and its experience in financing and fostering new technologies, Cathay Capital will make a difference in accomplishing this vision.
Hanbing Wang, Chairman of the Board, Yangtze River Industry Fund, says: “The automotive industry has become one of the core pillars of Chinese economy today and its economic contribution is growing too. Automobile manufacturing is a traditional core strength of Hubei Province. We are happy to partner with Cathay Capital and Valeo to promote this strategic sector’s growth and to seek new breakthrough in Hubei.”
Jacques Aschenbroich, CEO of Valeo, says: “Innovation is Valeo’s DNA. In addition to investing more than 11% of its original equipment sales in R&D on a global basis, and with more than 3,000 development staff in China, Valeo is also actively looking into the potential of local start‑ups, which form a particularly vibrant ecosystem in China. Following investments in venture capital funds in the United States, Europe and Israel, Valeo is rolling out its open innovation ecosystem in China. Through CarTech Fund, we plan to identify and develop more innovative products and technologies for our customers.”
Mingpo Cai, President of Cathay Capital Private Equity, says: “Automotive and mobility is one of Cathay’s key focus for years. Cathay Innovation has for instance invested in European largest P2P car rental platform Drivy and has completed the investment of China’s largest mobile car maintenance and services platform Lechebang. We also recently invested the world-class autonomous driving startup Momenta. China has a very promising automotive market and thanks to the launch of our CarTech Fund, we will encourage partnerships between young Chinese startups and leading international companies in order to accelerate mutual developments.”