China Post Capital, the investment arm of Chinese state-owned postal service China Post Group, has agreed to invest an undisclosed sum in Ant Financial, China-based e-commerce group Alibaba’s payment services affiliate.
The funding was provided through a private placement, Technode reported yesterday, and will make China Post the second largest shareholder in Ant Financial behind Alibaba itself.
Ant Financial was formed by Alibaba in 2014 and comprises Alipay, China’s most popular online payment platform, as well as several other online payment services including investment fund Yu’e Bao, credit scoring service Sesame Credit and digital bank MyBank.
The company has not revealed how much it has raised since the spin-out, but it reportedly closed a funding round in July that valued it at about $50bn.
China Post has been a strategic partner of Ant Financial since June 2014, and its financial services subsidiary Postal Savings Bank of China (PSBC) reportedly picked up a 3% stake in the company as part of a 2014 fundraising.
China Post runs more than 80,000 branches across China and PSBC oversees around 40,000, potentially giving Ant Financial access to the country’s small businesses and individual borrowers, particularly in areas outside large cities.
PSBC is reportedly preparing an initial public offering for 2016, the size of which could rival the $25bn IPO launched by Alibaba in September 2014.
Ant Financial’s other investors include China’s National Social Security Fund, which reportedly owns a 5% share, and China Development Bank, which holds 3%.