Jack Ma’s Ant Financial Services Group is set to close a $10 billion private fundraising round that would value the company at $150 billion.
The company has been preparing to go public, and now it looks like this could be the biggest IPO in history.
With that in mind, The Wall Street Journal reported that as part of the deal, investors putting money in the FinTech company must agree not to invest in or raise their stakes in companies controlled by rivals such as Tencent Holdings, JD.com, online services company Meituan-Dianping, and eCommerce company Pinduoduo.
"For a company that claims not to worry about us, they sure spend an awful lot of time worrying about us,” said a spokesman for JD.com.
While it's usually investors who set conditions for companies before handing over funds, the restrictions placed by Ant Financial show its significant market power, as well that of its affiliate, Alibaba Group Holding Ltd.
It also shows the high demand for Ant’s shares: Sources said that some investors were rejected because they weren’t offering enough money or had backed Tencent-linked companies.
Ant owns mobile and online payments network Alipay, which is used by more than half a billion people in China. The company also fulfills loans to individuals and companies, sells insurance and investment products and has other financial businesses. It generated $2 billion in pre-tax profit last year.
But Tencent, which owns social messaging app WeChat and a fast-growing payments network linked to it, has been chipping away at Alipay’s market share.
This is the company's third capital raise in four years, and the first to include investors outside of China. Investors include private equity firms Warburg Pincus and Carlyle Group LP, Singapore state investment company Temasek Holdings and the Canada Pension Plan Investment Board, according to people familiar with the matter.
Investment firm Tiger Global Management LLC dropped out of the fundraising because it found the terms unacceptable.