Lenovo Creates $500 Million Investment Fund for Startups

Lenovo, the world’s largest PC vendor and a significant player in the server space, reportedly is creating a $500 million fund to invest in startups in such emerging markets as artificial intelligence, robotics and cloud computing.

Citing statements May 4 by He Zhiqiang, a senior vice president with the Chinese company, Reuters reported that the Lenovo Capital Fund will be funded and managed by Lenovo Group, and comes after $100 million in investments the tech vendor already has made in more than 30 companies in such areas as mobile games, security and smart home devices.

However, the new $500 million fund will be the company’s most significant effort to date. Lenovo is joining a growing number of top-tier tech companies that have announced investment funds aimed at startups in emerging markets. For example, networking giant Cisco Systems two years ago announced a $100 million push to invest in startups involved in the Internet of things (IoT), and months later unveiled another $150 million fund targeting early-stage companies in such fields as the IoT, big data analytics, connected mobility, storage and innovation in India.

Intel last year invested more than $500 million in startups in a broad range of areas, including communications, networking, the IoT and wireless charging of mobile devices.

Lenovo’s announcement comes at a time when it is seeing increasing challenges in some of the established markets in which it plays. The company continues to be the world’s top PC vendor, but the global market continues to contract. In the first quarter, shipments of PCs year-over-year fell between 9.6 percent and 11.3 percent, according to analysts with Gartner and IDC.

As the PC market has struggled, Lenovo has been expanding its capabilities, spending almost $5 billion in 2014 to buy IBM’s x86 server business and the Motorola Mobility mobile device business from Google. However, despite the Motorola acquisition, in the first quarter, Lenovo—and fellow Chinese vendor Xiaomi—were pushed out of the list of the world’s top five smartphone vendors by lesser-known companies from China.