Xinchao Media Group, an elevator TV provider based in the southwestern Chinese city of Chengdu, has raised Rmb2.1 billion ($300 million) strategic investment from Baidu.
China Renaissance is the exclusive financial consultant for the deal.
Founded in 2007, Xinchao, which has more than 12,000 clients, provides television streaming in over 700,000 elevators in 100 cities. Advertisements are played repeatedly in elevators, forcing people to watch and listen to them - no matter whether they want to or not.
The elevator TV provider completed its Series F fundraising in March, with $863 million from investors that include LED lighting company Opple, furniture seller Macalline, Source Code Capital, and three other funds. By March this year, the company’s valuation had already hit $2 billion.
But Xinchao is neither the only, nor indeed the biggest player in the market. But Baidu’s help will certainly prepare it for the challenges ahead.
Shanghai-listed Focus Media has the largest market share in elevator TV streaming. It has installed devices in 2 million elevators in over 200 Chinese cities, more than double Xinchao’s figures. Focus has also made its presence felt in both commercial and residential buildings while Xinchao mostly focuses on residential buildings.
In July, Focus Media raised $2.2 billion strategic investment from internet conglomerate Alibaba, which wants to use streaming to reach its offline audience.
The difference in value is also huge between the two companies: Focus is worth $12.9 billion while Xinchao is worth only a sixth of that.
On Focus Media’s website, it is possible to see Alibaba, Tencent, JD.com, Toutiao and other internet companies all streaming their adverts through Focus. Baidu is the only internet giant absent from the list. With this fundraising, Baidu seems to have found its own private streaming channel.
Through this investment, Baidu will cooperate with Xinchao to target its audience with artificial intelligence technology. Xinchao also formed partnerships with China Mobile and Huawei in April to build a research centre together, making a quite complete industrial chain.
As society heads towards the internet-of-things, Baidu is trying its best to appear in front of audiences as much as possible.
This story has been corrected. Paragraph six should read "Shanghai-listed Focus Media", an earlier version of the story said Hong Kong-listed Focus Media”
