Hangzhou, one of China’s top fintech hubs, is pushing for blockchain innovation. Xu Liyi, mayor of Hangzhou city, has listed blockchain development into the official government report and several initiatives have been undertaken by the government to nurture a healthy blockchain ecosystem.

The Hangzhou government said in April that it would invest in a 10 billion yuan (US$1.6 billion) blockchain fund. At the opening ceremony of the Blockchain Industrial Park, it said it would invest 30%, or 3 billion yuan, in the fund along with Tulan Investment, a venture capital company. The fund, which claims to be the world’s biggest fund investing in blockchain projects, will be managed by Tulan and INBlockchain.

Hangzhou, the capital of Zhejiang province in eastern China, has previously said it had identified blockchain, along with artificial intelligence, quantum technology, biotechnology and life sciences, as a key growth area. According to the government, in 2016, Hangzhou’s economy was driven by information technology, which contributed with more than 50% of its overall gross domestic product growth.

Hangzhou has a long history with blockchain technology and cryptocurrency. 8bit, a leading information portal in China, was formally established in 2013 in Hangzhou. As 8bit expanded its influence in the community, Hangzhou became one of the most important city for blockchain enthusiasts who would gather and hold seminars.

Hangzhou-based VC Tunlan Investment is an early backer of Canaan Creative, a computer hardware manufacturer and one of the biggest cryptocurrency miner manufacturers in China. This deal helped build up the position of Hangzhou in the Chinese blockchain venture capital community.

After getting the investment, Canaan Creative moved to Hangzhou. In May, it filed for a US$1 billion Hong Kong initial public offering (IPO).

Fintech developments in Hangzhou

Hangzhou, the hometown of Alibaba Group Holding, China’s largest e-commerce company, has witnessed a rapidly evolving fintech ecosystem with several key developments occurring in recent months.

According to domestic media reports, fintech enterprise Aicai Group is another Hangzhou company in the space looking to launch its IPO in Hong Kong next year. Aicai Group CEO Qian Zhilong said that the company’s latest valuation excessed US$1 billion.

Aicai Group specializes in the provision of consumer finance services to younger generations. It has created a services portfolio of “financial ecosystem + fintech + asset management.” The company currently provides around a dozen different product lines, concentrated in the four areas of wealth management, consumer installment financing, small and micro-financing and automobile financing.

As Hangzhou is quickly making a name for itself on the global fintech scene, the city is attracting an increasing number of event organizers.

In July, TechCrunch International Innovation Summit gathered over 150 exhibitors and more than 8,000 attendees in Hangzhou to talk about future trends and new products.

Ant Financial updates

During the two-day summit, Zhang Hui, director of Ant Financial’s blockchain department, revealed the company’s initiatives in blockchain technology, specifically its focus on developing the consortium chain. He expressed his hopes that blockchain will create new business models for the company rather than simply provide value-added services.

Hu Xi, Deputy CTO of Ant Financial and partner of Alibaba Group, spoke about Ant Financial and the company’s future plans for globalization. Ant Financial expects to serve more than 1,000 financial institutions in the next three to five years, and accelerate the pace of opening up all Ant Financial’s businesses including Ant Check Later and Yu’e Bao.

In June, Ant Financial raised US$14 billion in what is believed to be the world’s largest-ever single fundraising. The Series C round pushes Ant Financial’s valuation up to US$100 billion, according to Bloomberg, making the Hangzhou-based company the world’s largest fintech firm.

Ant Financial is a key fintech player in China where it claims to serve over 500 million consumers. Globally, the company’s footprint exceeds 870 million consumers.

In recent years, Ant Financial has made investments and set up joint-ventures and new businesses in a slew of Asian countries that include India, Thailand, South Korea, Indonesia, Hong Kong, Malaysia, the Philippines, Pakistan and Bangladesh.

The firm posted a US$1.4 billion profit over the last year.

Besides Ant Financial, other notable fintech firms from Hangzhou include risk management services provider Tongdun Technology, bookkeeping services provider Wacai, and 51 Credit Card, a liability management, financial and technology services provider.

Featured image: Qianjiang CBD in Hangzhou, Wikipedia.