Ant Financial said to be in talks to raise US$10b in Temasek-led IPO

Deal could give Ant a US$150b valuation, making it the world’s largest start-up

PUBLISHED : Wednesday, 11 April, 2018, 12:01pm
UPDATED : Wednesday, 11 April, 2018, 12:01pm

Ant Financial is hoping to raise at least US$10 billion in a funding round that could make the Chinese payments giant controlled by Alibaba Group the world’s biggest start-up, according to sources familiar with the matter.

The deal could value Ant at US$150 billion, they said, while Singaporean state investment firm Temasek Holdings is believed to want to be the lead investor ahead of the highly anticipated initial public offering.

The company, in which Alibaba plans to acquire a one-third stake, controls China’s premier mobile payments service Alipay, which has moved deeper into areas from consumer lending to credit scoring.

China’s Ant Financial plans to raise funds at US$150 billion valuation ahead of initial public offering

Alipay has been instrumental in driving Alibaba’s core business and is increasingly employed in physical stores around the world, shadowing the movements of Chinese tourists. Alibaba shares rose 4.3 per cent in Tuesday New York trading.

If Ant achieves its desired valuation, that would mark a major spike for an online behemoth valued at US$75 billion just a few years ago by CLSA. Ant Financial and Temasek declined to comment. The Wall Street Journal first reported on Ant’s fundraising plan.

Alibaba has not held a stake in the owner of Alipay since Alibaba founder Jack Ma controversially spun out the business in 2011.

Formally known as Zhejiang Ant Small & Micro Financial Services Group, Ant Financial is based in Hangzhou, Alibaba’s hometown.

Alibaba Group vice-chairman Joe Tsai has said Ant is profitable in its three key businesses of payments, wealth management and lending to consumers and small and medium-sized businesses.

The company is drumming up its presence overseas via investments in India’s Paytm and Thailand’s Ascend Money, an arm of the agriculture-to-telecommunications conglomerate Charoen Pokphand Group.

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Ant, however, has had a string of recent setbacks, with its US expansion thwarted by the collapse of a deal for MoneyGram International, while its Chinese business faces scrutiny from regulators and increased competition from Tencent Holdings, the social media behemoth that runs WeChat.

The capital infusion would help Ant as it ramps up its consumer lending business in competition with Tencent. Temasek’s backing could also be key as it seeks to promote the use of Alipay beyond China.