China’s Ant Financial, the payments giant controlled by Jack Ma, raised about US$14 billion in its latest funding round as it accelerates the expansion of Alipay globally and develops new technology.
The financing included a US dollar tranche backed by Singapore’s sovereign wealth fund GIC Pte. as well as Warburg Pincus, Canada Pension Plan Investment Board, Silver Lake and Temasek Holdings Pte., the Hangzhou-based company said in a statement Friday. A yuan denominated component of the funding was supported mainly by existing shareholders.
The funding makes Ant the world’s largest fintech firm and equips it with enormous resources for expansion. The affiliate of Alibaba Group Holding Ltd. is already China’s biggest online payments service and controls the world’s largest money market fund as it moves deeper into areas from consumer lending to credit scoring. Ant Financial posted a 65 per cent jump in pre-tax profit, rising to 9.18 billion yuan in fiscal 2018 ended in March.
“Now, with the help of our partners, we are going to accelerate our strategy,” Chief Executive Officer Eric Jing said in the statement.
Ant Financial didn’t disclose a valuation from the funding round. The company was raising funds at a $150 billion valuation, Bloomberg News reported in May.
Other investors in the latest round included General Atlantic, Carlyle Group, Janchor Partners, Discovery Capital Management, Baillie Gifford, Primavera Capital and funds and accounts advised by T. Rowe Price Associates Inc., Ant said in the statement.
The capital infusion can aid Ant’s battle with Tencent Holdings for consumers while helping the company weather more stringent regulatory clampdowns.
Chinese authorities have become increasingly wary of systemic risk brought about by financial holding companies and regulators are considering asking those that straddle at least two financial industries to apply for an operating license and face minimum capital requirements, people familiar with the developments have said. Ownership and inter-group transactions could also be restricted, the people said.
Temasek’s backing could also be key as Ant seeks to promote the use of Alipay beyond China.
In February, Alibaba announced plans to buy a 33 per cent stake that would give the e-commerce operator its first ownership interest in its payments affiliate since it was controversially spun out in 2011. Formally known as Zhejiang Ant Small & Micro Financial Services Group Co., Ant Financial is based in Alibaba’s hometown. Its Alipay has been instrumental in driving Alibaba’s core business and is increasingly employed in physical stores around the world, shadowing the movements of Chinese tourists.