Two of China’s biggest Internet-focused companies — Alibaba and Tencent — have put their rivalry to one side to invest in China Media Capital’s smart-TV start-up Whaley Technology. The new company, which was founded by state-backed private-equity fund CMC this year, makes smart TVs. Alibaba, which is China’s biggest e-commerce platform, and Tencent, a market leader in social media, are generally big competitors in the digital space. Both companies are expected to provide a combination of capital, content and expertise. Their respective investments were not disclosed but the total investment in Whaley is believed to run into the hundreds of millions of dollars. Smart TVs are set to be the next battleground for consumer eyeballs in China.
Despite their rivalry, Alibaba and Tencent have shared investments before. Earlier this year, Huayi Brothers Media, China’s biggest private film company, inked deals with both companies that saw it raise $590 million (RMB3.6 billion) through a private placing of new shares. The strategic agreement with Alibaba covered e-commerce, online entertainment and movie development, while the pact with Tencent also covered movie development, online games and TV. Alibaba and Tencent each hold more than 8% of Huayi Brothers following on from that deal.
Content is likely to be a major element of what both Alibaba and Tencent bring to the table for Whaley. This week, Alibaba bought a $4.5 billion stake in electronics retailer Suning Commerce Group Ltd, another sign of it seeking to connect its software and hardware capabilities.