Today Ant Group, otherwise known as Ant Financial and owner of massive Chinese payments app Alipay, announced plans for an IPO. It said it would list on the Shanghai Stock Exchanges’ STAR board and the Stock Exchange of Hong Kong (HKEX/SEHK). Notably, there is no mention of a U.S. IPO, unlike NYSE listed Alibaba, the company that started Alipay and is a major shareholder.
“The innovative measures implemented by SSE STAR market and the SEHK have opened the doors for global investors to access leading edge technology companies from the most dynamic economies in the world and for those companies to have greater access to the capital markets. We are thrilled to have the opportunity to play a part in this development,” said Eric Jing, Executive Chairman of Ant Group.
In May, the U.S. Senate signed a bill requiring overseas firms with American listings to comply with U.S. auditing standards and financial regulations. The key issue is that U.S. regulators lack access to overseas audit records, particularly in China. This January, research was published into Nasdaq listed Luckin Coffee alleging falsified financial figures. Subsequently, the company said its COO had falsified figures and the company has since been delisted.
Following the publication of the draft legal bill last year, Alibaba did a secondary listing in Hong Kong. In June, other major Chinese firms JD.com and NetEase also conducted secondary listings in Hong Kong.
Ant’s listing is likely to be a large one, with an expected market capitalization in the region of $200 billion, according to a January Reuters report. Alipay started life as part of the Alibaba Group, before being separated out controversially in 2011, denying major Alibaba shareholder Yahoo an equity interest in it. Bloomberg reported last year that the spin off deal that gave Alibaba 37.5% of Ant’s pre-tax profits, was rejigged paving the way for the IPO.
Alipay currently claims 1.2 billion users globally, combining Chinese users and its overseas affiliates. It’s largest competitor on the mainland is Tencent owned WeChat Pay. While Alipay is the biggest source of revenue, the group now has several financial interests, including digital bank MYbank and its technology arm, which owns the proprietary Ant Blockchain. A sign that the listing was coming was a flurry of recent announcements, including a blockchain deal with major shipping firm COSCO.
According to Crunchbase, Ant has raised $22 billion to date. That includes a Series A in 2015 from China’s National Council for Social Security Funds and a 2016 Series B of $4.5 billion led by sovereign wealth fund China Investment Corp and a subsidiary of state-owned China Construction Bank. This was followed in 2018 by a massive $14 billion Series C financing. The USD tranche included Singapore sovereign wealth fund Temasek and GIC, as well as numerous other big names such as Warburg Pincus, General Atlantic and The Carlyle Group.