Tencent’s recent $150 million investment into Reddit was just one of 700 investments internationally and the Chinese company now has board seats on more than 400 of those companies, with 30% to 40% of its investments outside of China, reported the Financial Times.
Its investment portfolio is around double the size of its main Chinese rival Alibaba, and dwarfs those of US peers such as Facebook and Google. It has a value approaching that of Softbank’s Vision Fund. One tech lawyer described the process of Tencent’s investments as “feeding the empire.”
“Many people asked us if we are going to reduce our level of investments this year,” said Martin Lau, Tencent’s president. “I tell everyone right now. We will not do this.”
Targets are often receptive as Tencent offers the chance to reach more than a billion users. To achieve scale, Western firms need either the Shenzhen-based company or its Chinese rival Alibaba, especially in areas such as ecommerce. “It’s almost impossible to succeed in China retail without Alibaba or Tencent,” said James Root, Hong Kong-based partner at Bain & Co.