Ant Group

Ant Group (formerly Ant Financial), whose main business area is Alipay, China's largest online payment service, was spun off from Alibaba holding in 2011.

History

2023

Chinese government authorization to distribute AI products based on Bailing language model

Ant Group Co., a fintech unit of Alibaba Group Holding Ltd., received approval from the Chinese government in November 2023 to distribute products based on its massive Bailing language model to the public. According to company representatives, AI will be used in various Ant services.

Chinese tech companies, from Alibaba to Tencent Holdings and, Baidu have joined start-ups Baichuan and Zhipu to launch products like these, engaging in a ChatGPT global race to harness the potential of generative AI.

Alibaba and Tencent compete to create large language models.

Chinese authorities impose a fine on Ant Group in the amount of $984 million

Chinese regulators imposed a $984 million fine on Ant Group in July 2023, ending a more than two-year investigation into the fintech giant founded by billionaire Jack Ma.

Alibaba shares are rising amid the prospect of an end to Beijing's investigation.

Jack Ma loses control of Ant Group

On January 7, 2023, Chinese fintech giant Ant Group announced changes in its management structure. Billionaire Jack Ma lost control of this company.

Ma, a former English teacher who founded Alibaba's e-commerce platform, directly or indirectly controlled more than 50% of Ant Group. The company itself runs Alipay, the main online payment system in China. After changes in the management structure, Jack Ma will own a little more than 6% of Ant Group.

Jack Ma

In October 2020, Ma, during the Shanghai forum, criticized Chinese regulators in the financial sector. Almost immediately after that, the Chinese authorities canceled the procedure for the initial public offering (IPO) of Ant Group securities: it was expected that this process would bring in approximately $37 billion. Jack Ma himself has practically stopped appearing in public, and Chinese regulators have initiated the Ant Group restructuring process. At the same time, Alibaba was fined $2.8 billion in connection with violations of antitrust laws.

Ten people, including the founder, management and staff, will have voting rights at Ant Group after the reorganisation. Thus, due to these changes, no one will have full control over the company.

As a result, there will no longer be a situation where a direct or indirect shareholder will have sole or joint control over Ant Group, the company said in a statement.

The restructuring means Ant Group will be able to start preparing for the IPO again. But due to listing rules, this procedure will be significantly delayed. The fact is that in accordance with Chinese laws, companies cannot immediately carry out an IPO if they have changed their management structure over the past three years. The waiting period is two years for the Shanghai Star Market, which is an analogue of the American Nasdaq, and one year for the Hong Kong Exchange.^[1]

2021: Signing of binding documents on the creation of two joint ventures in Russia

On February 12, 2021, MegaFon informed TAdviser that, together with Mail.ru Group, USM, Ant Group and RDIF, they signed binding documents on the creation of two joint ventures (JVs) - payment and financial. Earlier, in 2019, the parties signed non-binding documents and announced a partnership to expand access to financial services in Russia. Read more here.

2020

Chinese authorities pressure on the company's microcredit business and IPO postponement

Since November 2020, the People's Bank of China has been actively hinting Alibaba CEO Jack Ma to stop playing loans and return to its roots - a boring payment business. The company fell out of favor due to the size of its subsidiary, Ant Financial. In November 2020, the regulator stopped its listing on the Hong Kong and Shanghai exchanges due to tougher lending policies. The company had to postpone the IPO, and Jack Ma himself made excuses to the regulator. But what is the reason for the persecution of him?

• Ant is the world's largest financial company, it owns the Alipay payment system, which occupies 50% of the Chinese payment market (it is used by more than 1 billion people around the world). Ant Group owns the popular payment app Alipay. Through it you can buy insurance, investment products, get a loan. Ant itself processes payments more than Visa and Mastercard combined.

• The key business for the company is microcredit and financial management. In 2021, the company is going to issue $290 billion in loans, and its largest money market fund in China manages $170 billion. For five years, Ant's microcredit services have grown into a monster that provides a tenth of all consumer loans in the PRC. This segment already brings it 39% of revenue.

• The credit business became a stumbling block between Jack Ma and the PRC government, as it was built around existing regulation and abused its position to pressure competitors.

Jack himself, however, decided to ignite as the last time and criticized the archaic traditional financial sector, accusing it of slowing down innovation. The PRC government did not like this and he was taken on the table with his face until he repented and offered to nationalize part of the assets. But this did not help either and the government interrupted the listing (the company wanted to raise $34.5 billion at a valuation of $313 billion). For its willfulness, Ant will now go through an antitrust investigation and is one step away from separation. But the main intrigue is different: will IPO participants be able to return the money if the company is divided?

IPO application

In August 2020, the fintech company Ant Group, a division of the Chinese Internet company Alibaba, filed an application for a simultaneous initial public offering (IPO) on the Hong Kong and Shanghai exchanges. The company could raise up to $30 billion, which could be the largest global IPO in history.

In late July, Ant Group said it had launched a simultaneous IPO process on Hong Kong and Shanghai exchanges. Earlier that month, media reported that Ant Group plans to hold an IPO this year on the Hong Kong stock exchange, which could become one of the world's largest in 2020.

It was assumed that Ant Group will sell from 5% to 10% of its shares in the IPO and may receive a valuation of the entire company at over $200 billion. At the same time, in the last round of financing in 2018, the company was valued at about $150 billion.

Name change to Ant Group

On July 13, 2020, the company changed its name to Ant Group Co., Ltd.

2019: WorldFirst Money Transfer Service Purchase

On February 14, 2019, Ant Financial Services Group announced the purchase of WorldFirst. Although the value of the deal has not been officially announced, several publications, including TechCrunch, know the price - about $700 million. Read more here.

2018

Attracting the largest investments at a time - $14 billion

On June 8, 2018, it became known that Ant Financial had attracted about $14 billion in investments. Previously, no other startup could collect such a amount of funds for one round of funding.

As specified in Ant Financial, the company received investments in both American dollars and Chinese yuan. The dollars accounted for more than $10 billion in investments, Reuters reports, citing people familiar with the situation.

Ant Financial raised $14 billion for one investment round, which no startup managed to do

Ant Financial named its investors: Singapore sovereign wealth fund GIC, U.S. private equity firm Warburg Pincus, state-owned Temasek Holdings, as well as Khazanah Nasional, Canada Pension Plan Investment Board, Silver Lake and General Atlantic.

The Wall Street Journal writes that investors could enter the round only if they did not invest in startups supported by Alibaba Group's rivals Tencent Holdings and an online store in the future JD.com.

We will build an open ecosystem with partners in China and beyond. We will invest in technology and innovation to provide financial services to people everywhere and enable them to enjoy the benefits of developing the digital economy, "said Ant Financial CEO Eric Jing.

The company forecast that about 65% of its revenue between 2018 and 2023 will come from business-focused fintech, such as corporate customer support and fraud prevention services. Ant Financial is paying less attention to the consumer market due to the growing control of financial risks by the Chinese regulator.

Ant Financial did not say what time investors valued the fintech startup. According to Reuters, the company is worth about $150 billion, making it one of the most expensive in the financial market.^[2]

In addition to the Alipay payment system, Ant Financial is developing a private equity lending and management business for 2018. Ant Financial promotes

•  Yu'e Bao Short-Term Investment Fund,
• Sesame Credit Customer Credit Assessment System and
• payment technology using face recognition.

Raising $10 billion in investments and valuing the business at $150 billion

In April 2018, it became known about the financing round of Ant Financial, in which the company raised at least $10 billion from investors and was valued by them at $150 billion, according to the Financial Times.

With this assessment, Ant Financial became the world's most expensive startup. Previously, the Uber taxi ordering service was considered such.

The main investor in the financing transaction Ant Financial was the Singapore state investment company Temasek Holdings, which hopes for an early placement of shares in the Chinese fintech developer.

According to The Wall Street Journal (WSJ), citing people familiar with the situation, Ant Financial is considering placing its shares on Chinese and foreign stock exchanges. The company itself does not comment on a possible IPO.

Alibaba, which in 2011 separated this company from itself, is also preparing for Ant Financial to go public. In February 2018, Alibaba announced the acquisition of a 33% stake in Ant Financial in order to open the way for the financial company to list.

Alibaba Group Executive Vice Chairman Joe Tsai says Ant Financial makes a profit in three key business areas: payments, private equity management and lending to small businesses and consumers.

Ant Financial funds received from investors will be used for international expansion. The company previously invested in Indian Paytm and Thai Ascend Money to take up business development in their countries. At the same time, the development of the American market failed due to an unsuccessful attempt to buy MoneyGram for $1.2 billion, and business in China is complicated by growing control by regulators and escalating competition.

An injection of capital can help Ant Financial expand its consumer lending business; in this market, the company has to compete with Tencent, Bloomberg said.^[3]

Notes