Morning Report: Alibaba’s financial technology affiliate Ant Financial is raising $9 billion more in funding.
Ant Financial, the financial technology company which houses the widely used Chinese payment service Alipay, is seeking $9 billion in capital ahead of its anticipated IPO according to the Wall Street Journal. The round may bring the company’s valuation close to $150 billion, making it the most highly valued unicorn with Uber trailing at a mere $68 billion.
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The company is no stranger to fundraising, picking up a $4.5 billion Series B round in April 2016. Further, the company has used its funds to make strategic investments and acquisitions. For example, Ant Financial invested in Korea’s Kakao Pay in February 2017 and acquired Singapore’s helloPay in April 2017. Most recently, the group attempted a $1.2 billion purchase of Moneygram in January which was blocked by the U.S. government over security concerns.Its freshly earned valuation and potential IPO could fund future global payment service acquisitions and give the company a leg up in its competition with Tencent’s WeChat pay in China and abroad.
Where Does Alibaba End And Alipay Begin?
Ant Financial, which was originally a subsidiary of Alibaba Group, spun out of the company in 2011 due to Chinese government regulations regarding financial transactions, according to Alibaba founder Jack Ma. The spin out led to tensions with with Alibaba shareholder, Yahoo!, which were later resolved.
Alibaba announced in February that it rearranged its profit relationship with Ant Financial. Alibaba’s original arrangement involved a 37.5 percent piece of Ant Financial’s pretax profit and 2.5 percent of the value of its outstanding loans yearly according to the New York Times. The new deal instead gives Alibaba a 33 percent direct equity stake in the company in exchange for intellectual property rights related to Ant Financial.
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Illustration Credit: Li Anne Dias
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