Ant Group, the financial services affiliate of China-based e-commerce firm Alibaba, filed yesterday for a dual listing on the Hong Kong Stock Exchange and the Shanghai Stock Exchange’s Star Market.
A source close to the IPO process told the Financial Times the company is looking to sell as much as 15% of its shares at a valuation between $200bn and $300bn, potentially placing the size of the dual offering at up to $45bn, though it said in the filing it plans to limit the issue to 10%, equating to a $30bn ceiling.
Formed by Alibaba to oversee its online payment platform, Alipay, Ant Financial was later spun off and has grown to encompass a range of products covering areas including credit services, insurance, investment management and a blockchain platform, AntChain.
The Alipay app alone has more than 710 million monthly active users, and 80 million merchants use it each month according to Ant. It generated $3.1bn in profit in the first half of 2020 from $10.2bn in revenue, according to the filing.
Ant closed a series A round featuring the state-owned social National Council for Social Security Fund in 2015. It did not disclose the size of the round – though earlier reports had suggested it would be about $4bn – but sources said it valued the company at $45bn to $50bn.
The company added $4.5bn in a 2016 series B round featuring postal service China Post and insurance firms including China Life as well as China Investment Corp, Primavera Capital Group, China Development Bank Capital and CCB Trust, a subsidiary of China Construction Bank, at a $60bn valuation.
Alibaba transferred certain intellectual property to Ant in 2018 in return for a 33% stake in the company, which subsequently raised about $14bn in series C funding at a reported $150bn valuation in June the same year.
The series C cash came from Primavera Capital, GIC, Temasek, Warburg Pincus, Canada Pension Plan Investment Board, Silver Lake, Khazanah Nasional, General Atlantic, Carlyle Group, Janchor Partners, Discovery Capital Management, Baillie Gifford and funds and accounts advised by T. Rowe Price.
Ant has not revealed the size of the stake held by each of its investors but said it will allocate the IPO proceeds to user acquisition, research and development, and the expansion of the services it offers, specifying cross-border payment and merchant services as potential growth areas.
Citi, JP Morgan, Morgan Stanley and China International Capital Corporation (CICC) are lead underwriters for the Hong Kong offering while CICC and China Securities are leading the Star Market IPO.
