Posted In:

Ant Group, Alibaba

Ant(s) Marching...


Aug 29, 2020


Posted In:

Ant Group, Alibaba


Aug 29, 2020



Ant Group’s IPO filing revealed some very un-ant-like numbers. The group's flagship product, Alipay, does more payment volume ($18t) than Visa and Mastercard combined ($16t), with approximately half in P2P payments. As impressive as that sounds, it is the evolution and diversification of the business that is the story.

Started as Alipay in 2004, Ant Group has transformed from a digital payments company for Alibaba to an aggregator of financial services. Today, the group's lending, wealth management, and insurance offerings count for 63% of its revenue. In the first half of this year, a further shift in revenue generation saw the credit business surpassing payments for the first time ever.

Imagine if 7% of apps available on the Apple store were bundled into a single app - that is essentially what Ant has with over 160,000 mini-apps within one super-app, Alipay.

While the US doesn't have one "super-app", big tech companies like Amazon, Facebook, and even Uber are charting a similar path. Amazon, for example, has partnered with Ola, Tapzo, and Cleartrip to expand their offerings globally while Facebook is focussed on offering community themed services like dating and marketplace.

Ant’s prospectus, for its dual listing in Shanghai and Hong Kong, states that “we call ourselves Ant because we believe that small is beautiful, small is powerful”, but if the company can keep this pace up, it will be marching on to a valuation more closely resembling an army of unicorns as opposed to anything reminiscent of its name.

Portfolio News

FinTech Collective invests in Fondeadora - We're incredibly excited to announce that we have invested in the $14m Series A financing round in Fondeadora. Fondeadora is building the first mobile only bank in Mexico with a full banking license. It is doing so via an elegant, savings-focused mobile banking app, linked to an international debit card, allowing people to send, spend and store money seamlessly. Founded in 2018, the company already manages 150,000 accounts and is adding $20m in deposits every month. Going forward, its ambition is to democratize savings accounts, allowing users to earn interest on their deposits in Fondeadora accounts. Read more

UK regulators ok Visa's planned acquisition of Plaid - The CMA said it took into account a broad spectrum of evidence, such as internal documents and input from different rivals, clients and retailers. The probe mainly focused on how the arrangement could impact competition in the consumer-to-business (C2B) electronic payments sector in which Visa via card-based payments and Plaid via payment initiation services (PIS) are active. Read more

Ant(s) Marching...

The transformation of Ant Financial - Today, Ant is aiming for a valuation of $200b to $300b in a dual-listing in Hong Kong and Shanghai, although meetings with investors are still ongoing. It still dominates mobile payments in China, but instead of competing with the financial sector, it has become a digital supermarket of others’ offerings, letting users buy on credit, invest in mutual funds, and find insurance through established players. It has even changed its name, from Ant Financial to Ant Group, to emphasize that it is a tech, rather than a financial services, company. Read more

How Ant Group turned into the Alibaba of Chinese finance - Ant's evolution into the Alibaba of finance has been fueled by a desire to claw back customers who began using WeChat more as it broadened out from a messaging service to an online platform for services of all sorts -- including mobile payments. More than 90% of Alipay's 1b users now access the app for more than just payments. Read more

Ant Group, the Alibaba payment affiliate, files to go public - Once people were using Alipay to stash their cash and pay for online purchases, Ant could begin offering them other kinds of services through the app, including personal loans and insurance policies. Alipay says it has 900m users in China. Read more

Industry News

WorldRemit to Acquire Sendwave in $500m Payments Deal - U.K. online money transfer company, World Remit, is buying Africa-focused, app-based remittance firm Sendwave. The combined company will be valued at more than $1.5b. Combined revenue is $280m and the value of transfers is $7.5b. Read more

The SEC changed its rules. Not only the rich can invest in private markets - Previously, accredited investors needed to have a net worth of at least $1m excluding the value of their primary residence, or an annual income of at least $200k for the last two years. Now, many more people may be able to make those investments, if they can prove that they are knowledgeable enough, including employees of investment firms or governmental bodies. Read more

NYSE’s plan for new IPO alternative wins green light from SEC - The decision by the SEC could make direct listings a more popular alternative to the traditional IPO. With the NYSE’s new type of direct listing, a company will be able to issue new shares and sell them to public investors in a single, large transaction on the first day of trading, much like the first trade in an IPO. Read more

Citi’s $900m misfire happened during software switch - Citi mistakenly sent $900m to a fleet of hedge funds reluctant to return it. While human error is mainly at fault, their use of arcane technology stretching back to the 1990s was really the issue. Citi is now waging a legal battle with the hedge funds to recover the funds. Read more

Nerdwallet acquires UK’s Know Your Money as it expands outside the US - Know Your Money is the U.K.’s largest financial products comparison site serving some 5m consumers and 1.2m businesses. The acquisition is the first of Nerdwallet's international expansion. Read more

Crypto giant DCG is betting $100m on mining Bitcoin in North America - Foundry, which has been operating below the radar since 2019, runs its own mining operations and also provides equipment and financing to crypto startups. Despite lucrative payouts, there are few significant crypto mining operations in North America. Instead, the industry has been dominated by Chinese conglomerates that pool resources while tapping into cheap sources of electricity. Read more

Afterpay acquires Spanish BNPL firm Pagantis to spearhead its advancements into Europe - With a market capitalisation of $19.8b, Afterpay is looking to Europe for its next expansion move. It will cost the fintech company €50m to buy Pagantis from NBQ Corporate SLU. Read more

China trials digital Yuan in retail settings - A new working paper from the Bank of International Settlements shows that the pandemic has led to increased interest among central banks for CBDCs. The share of central banks looking toward retail CBDCs in a one- to six-year timeframe had already doubled in 2019 to 20%. The report also found that as many as 80% of central banks are engaged in research, experimentation or development of CBDCs. Read more

ConsenSys acquires JPMorgan's blockchain platform Quorum - Quorum, which will remain open-source, is being used by the bank to run the Interbank Information Network, a payments network that involves more than 300 banks. The network and other bank projects running on Quorum will continue to operate using the platform, JPMorgan said. Read more

JP Morgan to launch digital lender in UK early next year - Goldman launched its digital challenger – which offers personal loans and savings services – back in 2018. The bank had to pause savings accounts for new users in June after it experienced a deposit surge to £21b. Currently, UK lenders are struggling to deal with ultra-low interest rates. A new lender entering the market could worsen this by sparking fresh price competition, hence putting further pressure on existing players’ margins. Read more

Cryptocurrency exchange FTX acquires portfolio tracker Blockfolio - The $150m acquisition by FTX is to launch a simpler trading experience for retail investors and involves a combination of cash, cryptocurrency, and stock. Read more

India's NPCI launches unit to take UPI and RuPay global - India's real-time digital payments system, UPI has been championed by many nations and institutions for its successful implementation in the country. The international expansion of NPCI will help expand the acceptance of RuPay and UPI that will further empower the Indians to use homegrown payment channels and platforms. Read more

Select Financings

Artis Technologies - Atlanta based provider of lending solutions for businesses raised $1.5m in Seed funding led by Fintech Ventures Fund. Read more

Commonstock - San Francisco based community platform for retail investors raised $9.7m in Seed funding led by Floodgate and QED Investors. Read more

Copper - Washington based app-based banking startup targeting teens raised $4.3m in Seed funding led by PSL Ventures. Read more

Finix - San Francisco based payment infrastructure platform raised $30m in a Series B extension round led by Lightspeed Venture Partners and American Express Ventures. Read more

Habi - Colombia based residential real estate marketplace with automated pricing tech raised $10m in Series A funding led by Inspired Capital. Read more

Open Payments - Sweden based open banking platform raised €3m in Seed funding led by Industrifonden. Read more

PrizePool - San Francisco based digital banking startup that incorporates cash prizes raised $4.3m in Seed funding led by Accomplice, Bling Capital, Coatue, SciFi VC, and World Innovation Lab. Read more

Socure - New York based identity verification startup raised $35m in new funding led by Sorenson Ventures. Read more

Stratify - Seattle based provider of automated budgeting tools raised $4.9m in Seed funding led by Madrona Venture Group. Read more


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