Ant Financial Services, the China-based payment services affiliate of e-commerce company Alibaba, will look to raise up to $4bn in a private placement, according to Shanghai Securities News.
The company will issue a stake sized at around 10% in the placement, which will be implemented at a $35bn to $40bn valuation. Ant Financial plans to follow it with an initial public offering in its home country in 2017.
Reports earlier this month stated Ant Financial was raising cash at a $30bn valuation, and that China’s National Social Security Fund, Postal Savings Bank of China and China Development Bank would all invest alongside undisclosed private equity firms.
Ant Financial operates several online payment services but the most well known is Alipay, the payment platform originally launched by Alibaba in 2004. Alibaba is guaranteed a stake of at least 37.5% in Ant Financial in the event of a liquidity event such as an IPO.
The latest report also claimed Ant Financial’s revenue increased 92% in 2014 to RMB 10.2bn ($1.6bn), while its net profit climbed 26% to RMB 2.6bn ($415m).
Investment bank China International Capital is acting as financial advisor for the prospective IPO.