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China’s Ant Financial Services Group is in talks with investors to boost its fundraising target to at least eight billion US dollars, which could see its valuation jumping to about 150 billion US dollars, people with knowledge of the plan said.
Singapore state investor Temasek Holdings is likely to be the lead investor in the latest round of equity raising by the company, controlled by Alibaba Group Holding Ltd founder Jack Ma, three people said.
Reuters reported in February that Ant, owner of China’s top online payment platform Alipay, was planning to raise up to five billion US dollars, which could value the firm at more than 100 billion US dollars.
Ant Financial Services Group, owner of the Alipay
The fundraising plan comes ahead of an expected stock market flotation, though Ant has neither set a timetable for the initial public offering nor has it chosen any location for the same.
One of the people said Ant could end up raising between eight billion US dollars and 10 billion US dollars as a result of strong investor demand.
All the people spoke to Reuters on the condition that they not be named as the fundraising details were confidential. Ant and Temasek declined to comment. Alibaba did not respond to a Reuters request for comment.
A pre-IPO round is an increasingly common move by sought-after Chinese companies to establish valuations and widen their investor base ahead of going public.
A 150 billion US dollars valuation would make Ant one of the biggest public flotations ever, dwarfing this year’s launch of Spotify and Dropbox. It would compare to the 104 billion US dollars float of Facebook six years ago or Alibaba’s own 168 billion US dollars valuation in 2014.
Ant’s last fundraising in April 2016 valued the company, seen by some analysts as one of the most valuable Alibaba assets due to its unique position in Chinese e-commerce, at about 60 billion US dollars.
Shares in e-commerce giant Alibaba rose 4.3 percent in New York on Tuesday.
Alibaba said in February it was taking a 33 percent stake in Ant, replacing the previous system where it received 37.5 percent of Ant’s pre-tax profit, in what was viewed as an important step ahead of any IPO.
“Part of the increase in valuation might be because the new investors have received extra features,” said Jay Ritter, an IPO expert, and professor at the University of Florida.
“But part of the increase is because the company is continuing to live up to expectations, and is becoming an even more important player in China’s mobile payment space.”
(CGTN)
