But the use of the proceeds is especially interesting. The Financial Times reports Ant is planning to spend 40% of the IPO proceeds on research and development, although the initial public offering filing has the percentage redacted.
Spending about $12bn on R&D catches the eye given most banks have tiny budgets for the area; Banco Santander is 101st in the top 1000 corporations, according to Idea to Value.
The main banks do however have large budgets for technology. JP Morgan, whose annual report avoids mention of research as a line item, spends about $12bn per year on tech but mostly for maintenance.
So Ant’s decision to plough more into R&D could be a competitive advantage over peers, especially when allied to its corporate venturing and a merger and acquisitions strategy, such as its purchase of a stake in India-based payments provider Paytm and the acquisition of cross-border service World First UK.
Global Corporate Venturing analysis of the three-year moving average for the top 25 companies by R&D spend from 2013 to 2016 (primarily the big tech companies, pharma groups and carmakers) found half also increased their CVC and M&A investments in this time period alongside increases in R&D spending.
Given Ant is controlled by Jack Ma, the founder of Alibaba who formed what was then just Alipay inside the online retailer in 2004 to build trust between consumers and vendors before spinning it off almost a decade ago, this is no surprise.
Ma, Alibaba and Ant’s focus is less on the legacy banks and financial services firms than tech peers, such as Alphabet, Amazon and Tencent, which do invest more across the innovation toolset.
And he has switched horses to do so. Having founded Alibaba in 1999, Ma retired last September and relinquished his 11% stake – having floated the business in a then-record IPO in 2014. Alibaba remains close to Ant as a one-third shareholder but Ma controls Ant through a shareholder covenant, the IPO filing shows.
Just as Ma switched from directories to e-commerce in the 1990s to tackle bigger markets inside China, he has switched again to financial services as a way to tackle the world through a so-called superapp. Even back in 2016, when it was still called Ant Financial, the company was targeting 2 billion users globally.
Now, as Ant Group, its horizons are still on the global goal and R&D is a tool to help get there.
