Alibaba Ant Financial To Raise $3.1 Billion In Funding Round

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.

Alibaba Alipay Reigns Over Mobile Payments In China

Alibaba is winning the game of online mobile payments in China with AliPay.

Alibaba Group Holding is considered as the most disruptive company in the Chinese tech sector. Ever since its inception, it is winning the game in its country with plans to conquer overseas markets as well in the near future. Immense growth has been noticed in recent times; hence, after conquering the Chinese market already, it is tapping on the world’s largest economy, the United States.

As far as China is concerned, the company is not only winning the e-commerce game but mobile payments game as well; the Chinese e-commerce giant introduced AliPay in 2013, which is an online payment service of Alibaba Group that has changed the paradigms of online shopping and made it more convenient for its users.

The world is advancing in technology largely and due to this, online mobile payments are gathering the pace throughout the world. It made a great impact in China, where now people mostly rely on online mobile payments. Hence, Alibaba is all set to take a bold step ahead and aim for the gold with AliPay, which currently has more than 350 million users registered to its platform along with 270 million active users monthly.

Furthermore, the company managed to defeat its United States’ counterparts. Talking about digital wallets and mobile payments, PayPal, who was previously a unit of eBay, now has around 162 million active users monthly. As The Street reports, “Alipay Wallet, which can be used for e-commerce purchases and in physical stores, has grown on the backs of more than 289 million monthly active users, who increasingly use it as opposed to entering in a credit card number.”

According to the Vice President of company’s financial arm, Fan Zhiming, said, “Alipay was established in 2004, initially to support escrow payment for Alibaba's online marketplace transactions. Mobile payment is becoming more important, especially the younger generation, and they make up a great part of Alipay users. So it is important that we develop our mobile payment capabilities via Alipay Wallet.”

So far, credit cards are not that popular or widespread in the Chinese market and not many people have access to these credit cards. Thus, an online mobile payment system, such as AliPay, is a proper solution for the nation to provide a huge relief to customers to avoid the need of big stacks of cash with them all the time.

The Chinese e-commerce giant has ‘disrupted’ the tech industry of the world by providing a great online marketplace platform to its people.