Google Takes Minority Stake in $300 Million China Startup Mobvoi

Google will take a minority stake in Beijing-based artificial intelligence firm Mobvoi as part of a $75 million (roughly Rs. 490 crores) fundraising round, the startup said on Tuesday, as the US search giant tries to rebuild its presence in China.

Mobvoi works on artificial intelligence (AI) voice-controlled software, like that used in Google's Android products for mobile search, and also develops hardware like smart watches. Google's parent company is now named Alphabet Inc.

The Google-led Series C fundraising values Mobvoi at $300 million (roughly Rs. 1,950 crores), with the startup maintaining a controlling stake, said co-founder Li Yuanyuan in a telephone interview. The size of the US firm's investment was not disclosed by Li or in Mobvoi's e-mailed statement on Tuesday.

The deal, not Google's first in China but one of few, comes as the company seeks to re-establish itself in the world's largest Internet market by population of users.

Because services like its search, e-mail and mapping are blocked in China, the US firm is trying to cement partnerships with domestic providers like Mobvoi, which offers technology similar to Apple Inc's Siri and Google's own version.

Mobvoi previously partnered with Google to provide Chinese-language voice search for the latter's Android Wear smartwatch operating system. The Chinese firm will use the money from its fundraising to invest in AI and robotics research.

Mobvoi is also developing voice search to be integrated into vehicles and a robot for families in China, said Li.

When contacted, a Singapore-based Google spokesman declined to elaborate on how the Mobvoi investment fit with its China strategy.

Although Google has maintained an engineering and sales presence in China, it largely withdrew its services out of China five years ago after refusing to continue self-censoring search results.

CEO Sundar Pichai has made no secret that he wants to get back into China, with his bet riding on Google Play, the app store for its Android mobile operating system, despite it currently being borderline inaccessible in China. He faces an uphill struggle.

© Thomson Reuters 2015