Alibaba Group’s financial affiliate is valued at over $50 billion, the newest sign of appetite for the tech-financial sector of China. The most valued internet finance organization of China ‘Ant Financial Services Group’ aims to raise $3.1 billion (20 billion Yuan) in its present financing round from a group of existing and new investors at a value of over a sum of $50 billion, revealed people aware of the situation.
The funding round will probably end up by April 15, they said. The fresh financing will provide the famous Chinese online payment service provider ‘Alipay’ more financial power as it purchases shares in businesses ranging from the Postal Savings Bank of China to a China based Lottery Company.
It has also set the stage for the future initial public offering of Ant financial – the most expected Chinese stake offer on the horizon. Bankers anticipate it earliest by 2017, possibly on the stock exchange of China. The present thinking of the company on an IPO venture continues to be clear, though it stated previously its receiving funds in Yuan would help it to easily list domestically.
Investors have been putting money in the financial-technology organizations based China, raising valuations. After operating for only over a year, Tencent’s division WeBank, which competes with MYbank of Ant financial, is receiving funds at a valuation of $5.5 billion.
Chinese Internet finance companies take advantage as they are technologically more advanced than the lumbering state banking service providers of the country. Organizations such as Ant financial believe that their vast amounts of analytics and data can be used by them to cut down the risk of lending to small borrowers – a financial market that has been eschewed by huge Chinese state banking institutions in favor of giving huge loans to other state-owned enterprises.
Now those huge organizations are troubled as online trading operations like JD.com and Alibaba move into economy’s new corners. Ant financial operates the online payments platform Alipay, which was a part of the Hangzhou-based company. Chairman Jack Ma controversially segregated the payment division from the company and took its control due to which major shareholder ‘Yahoo’ criticized him.
Alibaba said the regulations of Chinese government had driven the separation that could restrict Alipay’s ability to offer some payment services. Ant financial was not included in Alibaba’s record making $25 billion IPO, but due to a profit-sharing deal, the company will cash on any IPO of Ant financial. The control of the affiliate is also in hands of the executives of Alibaba.
Chief executive of Ant financial, Lucy Peng, also serves as a senior executive of Alibaba. Mr Jack personally owns a minor share in Ant financial.
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