China’s Ant Financial is seeking to raise at least $10 billion in a funding round that could make the payments giant controlled by Alibaba-founder Jack Ma the most valuable startup in the world, according to people familiar with the matter.
The deal may value Ant, backed by Chinese e-commerce titan Alibaba Group Holding Ltd., at $150 billion, said the people, asking not to be named because the matter was private. Singaporean state investment firm Temasek Holdings Pte wants to be the lead investor ahead of a highly anticipated initial public offering, one of the people said.
If the deal goes ahead, Ant would be the world’s largest fintech company and the biggest startup. The company, in which Alibaba plans to acquire a one-third stake, controls the country’s premier mobile payments service and money market fund, and has moved deeper into areas from consumer lending to credit scoring. Its Alipay has been instrumental in driving Alibaba’s core business and is increasingly employed in physical stores around the world, shadowing the movements of Chinese tourists. Alibaba shares rose 4.3 percent in New York trading.
If Ant gets its desired valuation, that would mark a major spike for an online behemoth valued at $75 billion just a few years ago by CLSA Ltd. Ant Financial and Temasek declined to comment. The Wall Street Journal first reported on Ant’s fundraising plan.
Alibaba hasn’t held a stake in the owner of Alipay since Ma controversially spun out the business in 2011. Formally known as Zhejiang Ant Small & Micro Financial Services Group Co., Ant Financial is based in Hangzhou Alibaba’s hometown. Alibaba Vice Chairman Joe Tsai has said Ant is profitable in its three key businesses of payments, wealth management and lending to consumers and small and medium-sized businesses.
The company is drumming up its presence overseas via investments into India’s Paytm and Thailand’s Ascend Money, an arm of the agriculture-to-telecommunications conglomerate Charoen Pokphand Group.
Ant’s however had a string of recent setbacks, with its U.S. expansion thwarted by the collapse of a deal for MoneyGram International Inc., while its Chinese business faces scrutiny from regulators and increased competition from Tencent Holdings Ltd., the social media behemoth that runs WeChat.
The capital infusion would help Ant as it ramps up its consumer lending business in competition with Tencent. Temasek’s backing could also be key as it seeks to promote the use of Alipay beyond China.