Alibaba affiliate Ant Financial closes $6b funding round

Ant Financial Services is an affiliate of the Alibaba Group, founded by Mr Jack Ma.
Ant Financial Services is an affiliate of the Alibaba Group, founded by Mr Jack Ma.

BEIJING • China's biggest e-commerce firm Alibaba Group's affiliate Ant Financial Services has closed a US$4.5 billion (S$6.1 billion) funding round, paving the way for a long-expected initial public offering (IPO).

China Investment Corp Capital and CCB Trust, a subsidiary of China Construction Bank Corp , participated in the Series B fundraising, Ant Financial said in a statement yesterday.

Ant Financial did not disclose what its valuation was after the round closed, but a person familiar with the fundraising said it is now valued at close to US$60 billion.

The Alibaba affiliate's latest fundraising is the biggest for a private Internet company. But the firm is also much older than its fundraising peers, and is only now gearing up for an IPO after 12 years and a rebranding in 2014.

Ant Financial is among a series of financial technology firms tapping investors for pre-IPO financing to fund expansion as Chinese consumers move more of their banking and investing online. The firm has confirmed plans for an IPO but has previously said it does not have a timeline for the process. It did not comment yesterday.

"The capital raised in Series B will allow us to invest in the infrastructure, such as cloud computing and risk control, that will underpin our long-term growth in rural and international markets," said Ant Financial president Eric Jing in yesterday's statement.

Those risk control measures include biometric verification technologies. This could help Ant Financial's private banking venture, MYbank, overcome blocks set by regulators on taking deposits, with the authorities concerned about keeping transactions above-board.

Existing Ant Financial shareholders China Life Insurance, China Post Group, the parent of Postal Savings Bank of China, China Development Bank Capital and Primavera Capital Group also took part in the round, the online finance firm said.

Ant Financial offers services like online payments, wealth management products and insurance. Its core Alipay online payment business was founded in 2004. Its micro lending business handled about 30 billion yuan (S$6.3 billion) of loans in January.

But the firm is now facing strong competition in the form of Alibaba archrival Tencent Holdings' WeChat Payment, which has quietly become one of the world's largest payment systems.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 27, 2016, with the headline 'Alibaba affiliate Ant Financial closes $6b funding round'. Print Edition | Subscribe