Alibaba cements ties with Ant Financial via 33% stake
Chinese ecommerce giant Alibaba Group has announced the acquisition of a 33% stake in compatriot fintech firm Ant Financial.
Ant Financial’s premier product is Alipay. As the preferred payment method of Alibaba’s marketplaces such as AliExpress, it offers a secure platform for online and mobile payments, and has become exceedingly popular in China. As of 2018, the Financial Times reported that the service boasted 622mn users and handled more than half of the $15.5trn of digital payments taking place in the country.
Other offerings from Ant Financial include wealth management app Ant Fortune, private online bank MYbank and Zhima Credit, which assesses the credit rating of those previously outside the financial system. Taken together, Ant Financial’s products make up a whole financial ecosystem targeted at the Chinese market.
Ant Financial is already an affiliate of Alibaba, having been created out of Alibaba’s payment platform Alipay. Spun off from Alibaba in 2010, Alipay acquired its current name in 2014, though Alipay remains the name of its subsidiary payments platform. The development terminated the previously existing agreement between the two for Alibaba to receive 37.5% of Ant Financial’s pre-tax profits.
In Alibaba’s press release, the move was suggested to stem from a 2014 agreement. The deal itself has been slow to bear fruit, with news of the purchase previously cropping up in early 2018.
The spectre of Jack Ma, founder and, until recently, executive chairman of Alibaba, looms over the deal. It was Ma who controversially spun off and subsequently re-acquired Alipay, and this restructuring of the company’s relationship is one of the first major moves of the post-Ma era under new leader Daniel Zhang.
As reported in Bloomberg, Zhang spoke at an Alibaba investor conference, saying: “Every year we generate new stuff and we acquire new stuff. We never stop. Payment and financial services are very important pillars in Alibaba’s system.”
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.