The IPO for Alibaba’s affiliate Ant Financial Services could be inching closer as the company is in the “critical stage” of funding negotiations that could value the company at $30 billion, Caixin magazine reported Monday (Feb. 9).
According to the report, some of the strategic investors involved in discussions include the China’s state-backed Social Security fund, Postal Savings Bank of China and CDB Capital — which would seek somewhere around 3- and 5-percent stakes. Alibaba has not provided any comment on the matter, nor have any of the possible investors. Ant Financial runs Alibaba’s online payment platform Alipay — the most widely used in the region and a leading service behind the e-commerce giant’s success.
Ant Financial is expected to go public sometime in 2016, and early estimates showed the company’s value at $50 billion. Alipay spun out of Alibaba in 2011, giving Jack Ma a controlling interest in the new company, Ant Financial. In addition to Alipay, Ant Financial provides a number of financial services to Chinese consumers, including money market funds. Upon going public, Alibaba will be entitled to a share of earnings at Ant Financial. Earlier in the year, Ma hinted that Alipay/Ant Financial would go public but declined to provide a timeframe. He’s continually talked about listing Ant Financial, but hasn’t publicly given a date.
“By raising funds through an IPO, the company could have more money to develop a variety of online finance products and cater to smaller businesses,” said Wang Weidong, an analyst at Shanghai-based Internet consultant IResearch.
And if there’s any company that knows about hitting a big IPO it’s Alibaba, the company that broke the record for the largest IPO in history at $25 billion in September 2014.
Most recently, Ant Financial announced it was adding a 25 percent stake in Indian mobile payments company One97 to its portfolio. This move appears to line up with Ma’s vision of getting Alibaba more involved in India, which is the largest consumer base for his company after China. The exact dollar figure on that deal was not disclosed, though sources told Reuters that the stake could be worth about $550 million.