Ant Group, the Chinese fintech titan, is expected to raise around $ 34 billion when its shares start trading in Hong Kong and Shanghai in the coming weeks, which would make its initial public offering the largest on record.
The company, the parent company of mobile payment service Alipay, valued its shares at around $ 10.30 each, according to documents released Monday by stock exchanges in both cities. At that price, the company was worth around $ 310 billion, a market value on par with JPMorgan Chase and higher than many other global banks.
The money Ant raised is believed to exceed the $ 29.4 billion that Saudi state-owned oil company Saudi Aramco raised when it went public last year. Ant’s listing is also said to be higher than that of its sister company, Chinese e-commerce giant Alibaba, which raised $ 25 billion when its shares started trading on the New York Stock Exchange in 2014.
For hundreds of millions of people in China, Alipay could just as easily be a bank. It’s their credit card, their debit card, their mutual fund and even their insurance broker – all on one mobile platform. It is a small business lender, both online and offline, that might otherwise be overlooked by China’s large state-owned banks. Alipay has more than 730 million monthly users, more than double the population of the United States. For comparison, PayPal has 346 million active accounts.
Like other giant internet companies, Ant says his strength lies in performing a lot of different tasks at once. The more people use Alipay to buy lattes, for example, the more data it collects on their purchasing power. Ant says this information enables it to offer loans, investments, and insurance policies that meet users’ needs. The data also helps Ant and its partner banks determine who is likely to repay it.
Yet the merger of finance and technology is attracting interest from regulators everywhere, and Ant has not been spared the scrutiny. In recent years, China has severely cracked down on shady online lending and investment programs. Regulatory pressures have led Ant to temper his ambitions in certain areas since his separation from Alibaba in 2011.
Today, the company emphasizes that Alipay is just the gateway through which its users access financial services. Lending and investing is still mostly done by established institutions – a message that crystallized when the company, previously called Ant Financial, removed the second word from its English name this year.
Last year Ant made $ 2.7 billion in profit on $ 18 billion in revenue. It claims to have processed $ 17 trillion in digital payments in mainland China in the 12 months that ended in June.