Alibaba Financial Arm, Ant Financial Services Group, will be valued at $50 billion ahead of its IPO.
Alibaba Group Holding is a huge business that is dominating the Chinese e-commerce industry. The company owns and runs its online marketplaces under the main Alibaba business. It also wants to be more than just an e-commerce organization. The company expanded its footprints in different categories, such as cloud computing sector and online mobile payments etc., and it is performing really well in all of its businesses. The cloud-computing sector is one of the dominant forces in the industry and is reckoned by top companies throughout the world.
Alipay is China’s most used online payment platform. It is owned and operated by Alibaba Group’s financial affiliate Ant Financial Services Group. According to the Wall Street Journal, investors have come up with a valuation of a hefty amount exceeding $50 billion on the deal of Alibaba’s financial affiliate service. This is the next big thing for the financial tech sector in China.
Ant Financial Services Group is currently the most valuable Internet finance company of the region, which is all set to raise a value of nearly $3.1 billion (20 billion Yuan) in its recent funding round. Reportedly, the funding round will have several new and existing investors that will raise the valuation of Ant Financial Services Group to more than $50 billion. Sources close to the knowledge of this deal stated that the funding round will be completed by the mid of next month.
It is obvious that the new funding round will further bolster Alipay’s position in the Chinese market. The fresh fundraising will give Alibaba’s online payments platform more financial freedom to the finance arm, which is known for buying stakes in numerous Chinese businesses varying from lottery companies to postal savings bank. It recently acquired AGTech Holdings.
This is supposed to be the last funding round as the Financial Arm is closing in on its IPO. The funding round will perfectly set the stage for its Initial Public Offering. According to the bankers, it will post its IPO in as early as the beginning of 2017 and it will be on the Chinese stock exchange.
It is not only about Ant Financial Services Group but Chinese investors have been pouring money in the tech sector for a very long time now. The valuation of Chinese financial technology companies is soaring. Sources familiar with the matter said that WeBank – backed by Tencent Holdings – is capable of raising money at a massive $5.5 valuation. WeBank also competes directly with MYBank of Ant Financial.
Alibaba has created new revenue streams in the past years. As the economy of China declines, it is struggling to grow in the domestic market; hence plans to expand in international regions through deals and acquisitions. It still keeps the major 80% market share.
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