Leading Chinese Internet firm Tencent and Shenzhen Huaqiang Holdings, a major hi-tech firm, have launched a joint plan worth 10 billion yuan ($1.61 billion) on July 12 to raise and nurture hardware startups, with the aim to create 100 hardware firms in three years with valuation of over 100 million yuan ($16.1 million) each, the Economic Observer reported.
The report said that the plan would require the integration of the two firms' assets--Tencent's strength in software and massive traffic, and Huaqiang's technological power--which will help in the development of hardware startups.
According to the report, Tencent has offered to provide startups with the use of its six major resources, which include the three major hardware platforms, namely, the Internet of Things built by QQ, the hardware of WeChat and TOS (Tencent operating system).
Startups can also have free access to Tencent cloud for six months and 50 percent discount for services of Tencent's startup assistance plan in the next six months, as well as access to the services of the hardware laboratories at its 25 collective-startup offices nationwide.
They can also join in the 1-billion-yuan ($161.1 million) smart-hardware competition, including access to the 10 billion traffic of Tencent and its startup venture capital fund.
Huaqiang is similarly offering six major resources, which include supply chains, manufacturing assets (especially the capability to manufacture in small volume but large varieties), testing and certification, design capability, sales channel, and their marketing expertise.
According to the Economic Observer, the plan would give Tencent a chance to get into hardware business and not to depend solely on software to sustain its growth in the era of the Internet of Things. The Internet giant has also set up 25 collective startup offices with over 500,000 square meters in space nationwide.
On the other hand, the plan would also give Huaqiang the opportunity to pursue other levels of development, at a time when the growth of e-commerce and a decline in the PC hardware business have affected its business of manufacturing electronic parts/components.
Huaqiang launched an international startup center in May with 5,000 square meters space on the seventh floor of "Huaqiang Electronic Marketplace," which provides one-stop services to hardware startups, including supply chain, ecological circle and capital injection. The center will be expanded to 30,000 square meters in space in its second stage.