Chinese Tech Giant Tencent In Talks Over Oxford Nanopore Stake

British biotechnology start-up Oxford Nanopore is reported to be locked in talks with Tencent, the Chinese tech giant, over a stake in the company. Tencent, which makes most of its money from mobile gaming and apps but has diversified across the technology landscape in recent years, looks set to increase its exposure to the health and biotech sectors.

Negotiations are focused on the potential acquisition of all or a part of the 11% stake in Oxford Nanopore currently held by fund manager Invesco. The development was reported by Sky News over the weekend.

Oxford Nanopore develops gene sequencing technology and was originally an Oxford University research project before being spun-out as an independent start-up company in 2005. It is headquartered in the Oxford Science Park, a renowned biotech hub, and currently employs 500 people between Oxford and two satellite offices in Beijing and Shanghai.

Still privately owned, Oxford Nanopore has raised a total of £529 million from investors. A £48.9 million round closed last month valued the company at around £1.6 billion – slightly down on its most recent previous valuation. The funding came from both new and existing shareholders in EMEA, US and Asia and adds to the £29.3 million of capital raised that was announced on 2 January.

As well as Invesco, other major investors in Oxford Nanopore include FTSE 250 intellectual property commercialisation company IP Group, which holds a 15.9% stake in the company, U.S. pharmaceuticals company Amgen in GIC, the Singaporean sovereign wealth fund.

Tencent’s technology holdings range from Wechat, the messaging app that is hugely popular in the Chinese-speaking world and other parts of Asia, a music streaming service and a large portfolio of mobile and traditional video games. Tencent holds a 40% stake in Epic, the developer of the hugely popular Fortnite video game.

Led by Ma Huateng, the entrepreneur better known as Pony Ma, Tencent has been building up its interests in the health tech space. Investments include online healthcare app Wedoctor, which is expected to IPO in Hong Kong later this year.

Oxford Nanopore is currently involved in the development of a Covid-19 test in partnership with UAE-based cloud computing operation Group 42. Both the British biotech and Invesco, whose stake Tencent is said to be in negotiations over, have declined to comment on the reports.