China-based financial services provider Ant Group, spun off by e-commerce group Alibaba, received regulatory approval for the Shanghai branch of its IPO. The news came after China’s Securities Regulatory Commission granted clearance for a Hong Kong offering earlier. The company intends to issue up to 1.67 billion shares on each exchange, representing a total of 11% of its enlarged shares. Ant plans the dual listing spanning both markets and could reportedly seek $35bn in proceeds at a $250bn valuation. Several existing shareholders have reportedly agreed to buy 80% of the shares through the Shanghai offering. Alibaba is set to retain a 32% stake in the company.
Launched as Ant Financial in 2011, the financial services arm of Alibaba, Ant offers a host of financial products. The company’s flagship product is mobile wallet and payment platform Alipay, which dominates more than half of China’s mobile payment market, with other tools including credit scoring platform Sesame and money management fund Yu’e Bao. Ant also oversees digital bank MyBank and credit scoring service Zhima as well as insurance, wealth management and consumer lending products.
Ant is part of the broader payment tech space which is an area corporate venturers have not been indifferent about over the past decade. However, as the chart from GCV Analytics below shows, the number of exits (including IPOs) from this space has been relatively modest even over the latter part of the decade. It was not until 2020 and the additional boost given to this space by the pandemic when we saw a total of 15 such transactions, totalling an estimated capital of over $6.67bn.
