Today, social media and content giant Tencent disclosed its investment record for the first time, Chinese media reports. Over 11 years, Tencent has amassed a portfolio of 700 companies around the globe, 63 of which have gone public.
Martin Lau, president of Tencent Holdings, made the announcement at a closed-door investor conference in Beijing on Wednesday. He added that the company will not shrink its investment volume this year since its investment strategy allows it to focus on its strengths, leaving other areas to their partners.
“2018 was the best year for [Tencent investment], but, this year, we are facing more challenges in the short term,” Lau said. “There are fewer opportunities in growing markets, while competition in mature markets will intensify.”
The Chinese internet titan had a bumper year with 16 portfolio firms going public in 2018. A slew of local internet companies filed their IPO paperwork last year, including online retail platform Meituan Dianping, online ticketing portal Maoyan, as well as Tencent-owned Tencentnt Music and China Literature. Many of those were on the hunt for the necessary liquidity to make it through what some have dubbed China’s “coldest capital winter” in a decade.
Tencent formed its M&A and investment team in 2008. It counts only 20 members who review at least 200 companies annually. In 2018, the Chinese giant started facing criticism in Chinese media for over-relying on its portfolio. Commentators believe it can be short-sighted, which is why it is losing ground in core businesses.
Lau responded by saying one of Tencent’s top priorities is to identify new resources and bring them together under its umbrella. In September 2018, Tencent announced a restructuring coupled with a strategic upgrade. Its renewed aim is to prioritize cloud computing and artificial intelligence and target a wider group of industry-focused customers.
“For example, the healthcare sector has such a long chain, and therefore excellent business integration and packaging are needed to reach users,” Lau said the company expects to “combine its capabilities in serving both consumer and business markets,” in order to gain an advantage in B2B internet applications.