PE firms back record $14bn funding round for China's Ant Financial

The investment – which reportedly values the company at approximately $150bn – comprises renminbi- and US dollar-denominated tranches. Khazanah Nasional, Temasek Holdings, General Atlantic, T Rowe Price, Janchor Partners, Discovery Capital Management, Baillie Gifford and Primavera Capital are among the other participants in the international tranche. Several of them also contributed to Ant Financial's $4.5bn series-B in 2016. That round was completed at a valuation of $60bn.

"Ant Financial has a leading technology-driven open platform to empower financial institutions and other partners globally," Ben Zhou, a managing director at Warburg Pincus, said in a statement. "It's the most uniquely positioned techfin company in the world." He added that this is "by far the largest single fundraise by any company in the world".

The company will use the new funding to accelerate Alipay's globalisation plans and invest in developing technology with a view to enhancing the company's financial services offering. Ant Financial said in a separate statement that it would also "cultivate high-tech talent in emerging markets to help communities take advantage of the opportunities arising from digital transformation", which suggests the trend of investment in startups – in China and overseas – will continue.

Alipay was launched in 2004 as the payment gateway for Alibaba's e-commerce properties, and the business now has 520 million active users. Alongside WeChat Pay, it has become the default mobile payment option in China for everything from buying movie tickets to settling utility bills. Mobile transactions in the country totaled $20bn in 2017 and are expected to increase threefold by 2022. Meanwhile, the company's in-store payment service is now present in 40 countries.

Ant Financial was established in 2014 as Alipay's holding entity, but it has branched out into many other areas of financial services. Wealth management app Ant Fortune enables customers to access products like Yu'e Bao, China's largest money-market fund, while Mybank was launched in 2015 as the country's first private online bank. Ant Financial also has credit assessment business Zhima Credit and enterprise services platform Ant Financial Cloud.

As of March, the company was serving more than 15 million small businesses in China and – together with its global joint venture partners – 870 million users worldwide. It posted RMB 9.18bn ($1.43bn) in pre-tax profit for the 2018 financial year, up 65% year-on-year. The company plans to continue investing in its technology platform, including blockchain, artificial intelligence, security and internet-of-things capabilities.

Ant Financial dwarfs the financial services businesses of all other Chinese internet companies apart from Tencent Holdings, which owns WeChat. A couple of these entities have been spun out in the last year or so, enabling private equity firms to make investments. Online retailer JD.com sold its entire 68.6% stake in JD Finance for RMB 14.3bn last year, while TPG Capital and Carlyle led a $1.9bn funding round for Du Xiao Man in April as it was spun out from Baidu.

This article was originally published in Unquote sister publication AVCJ

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Expansion
• Technology
• Financials
• Warburg Pincus
• Carlyle Group