Ant Financial, China’s most valuable Internet finance company, is raising funds from new and existing investors after receiving strong demand for its shares, according to people familiar with the situation. The Wall Street Journal reported in March that Ant Financial was planning to raise up to 20 billion yuan ($3.1 billion) at a valuation of more than $50 billion. The funds being raised now will exceed that amount, the people said.
China Investment Corp. and China Construction Bank Corp. are lead investors for the latest round, which includes several of China’s biggest insurance companies and a handful of other small investors, people familiar with the situation said. The funding round is expected to close by the end of the month, the people said.
The fresh fundraising will give the operator of popular Chinese online payments platform Alipay more financial muscle as it buys stakes in businesses ranging from a Chinese lottery company to China’s Postal Savings Bank.
It also sets the stage for Ant Financial’s future initial public offering—the most anticipated Chinese share offering on the horizon. The company doesn’t have a timeline for an initial public offering yet, Ant Financial’s vice president Cyril Han told an audience at a conference in Hong Kong this week. Bankers have said previously that they expected an IPO for Ant Financial as early as 2017, potentially on a local Chinese stock exchange.
Ant Financial runs the Alipay Internet payments platform, China’s largest, which used to be part of Alibaba. The group’s chairman Jack Ma controversially separated the payment unit from the e-commerce company and brought it under his control, drawing criticism from major shareholder Yahoo Inc. Alibaba said the separation was driven by Chinese government rules that could limit the ability of Alipay to provide certain payment services if it wasn’t a domestic company.
Ant Financial, with more than 400 million annual active users, operates a number of products closely linked with Alibaba’s e-commerce and online marketplace businesses, including Alipay, online money-market fund Yu’e Bao and MYbank.
Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and China International Capital Corp. Ltd. are advising Ant Financial on the current fundraising, according to people familiar with the situation.
Ant Financial raised more than 12 billion yuan ($1.9 billion) last year in its first round of fundraising, attracting a dozen outside investors led by China’s national social security fund. China’s four biggest insurance companies—China Pacific Insurance Group, People’s Insurance Company of China, China Life Insurance Co. and New China Life Insurance Co. Ltd.—each took stakes, according to Ant Financial shareholding records. Those disclosures also confirmed that private-equity firm Primavera Capital, led by former Goldman Sachs partner Fred Hu, is a shareholder.
Other investors include national postal service China Post Group, Chinese policy lender China Development Bank and state-owned Shanghai Financial Development Investment Fund.