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Jack Ma's Ant Snags Carlyle for $10 Billion Funding, Sources Say

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  • CPPIB is also said to join the round, closing in coming days
  • Ant Financial is said to be valued at about $150 billion

Ant Financial, the Chinese payments giant controlled by Jack Ma, is expected to close a fundraising of at least $10 billion in the next few days, attracting Carlyle Group and the Canada Pension Plan Investment Board as first-time investors, according to people familiar with the matter.

The Hangzhou-based company is said to be valued at about $150 billion in this round, the people said, requesting not to be named because the matter is private. The funding will be mostly used for overseas expansion, the people said.

The $10 billion funding, which Bloomberg News reported last month, makes Ant the world’s largest fintech firm and equips it with enormous resources for expansion. The company is already China’s biggest online payments service and controls the world’s largest money market fund as it moves deeper into areas from consumer lending to credit scoring. Ant Financial posted a 65 percent jump in pretax profit, rising to 9.18 billion yuan ($1.4 billion) in the fiscal year ended in March, according to Bloomberg calculations based on company filings.

“Ant Financial’s mobile payments network is unique and can’t be found anywhere else globally, it’s quite hard for rivals to replicate them in other countries,” said Ben Zhou, a managing director at Warburg Pincus, which is also joining this round of fundraising. “Ant is also evolving as a company and its revenue from tech service fees will likely grow much bigger, as it’s opening up its platform to other financial firms such as smaller banks.”

Read more: Jack Ma’s Too-Big-to-Fail Financial Giant Faces a Clampdown

Ant Financial doubled its revenue from tech services provided to other platforms such as banks in fiscal 2017, accounting for 35 percent of revenue in total, according to investor slides seen by Bloomberg. Revenue from its financing business, including cash loans, only contributed 11 percent while the lions share came from its online payments business, reaching 54 percent, thanks to the fee that Ant charges other platforms for using Alipay.

Singaporean state investment firm Temasek Holdings Pte is also an investor in the latest financing, people familiar with the matter have said previously.

Carlyle spokesman Brian Zhou declined to comment, as did Ant Financial. CPPIB’s external spokeswoman declined to comment.

Temasek’s backing could help Ant as it seeks to promote the use of Alipay beyond China.

Ant, the financial affiliate of Alibaba Group Holding Ltd., is formally known as Zhejiang Ant Small & Micro Financial Services Group Co. Spanning online payments, insurance, lending, credit scores, asset management and more, the behemoth resembles a mashup of PayPal, Geico, Wells Fargo and Equifax -- with a bit of BlackRock thrown in for good measure. Thanks to clever mobile apps and a burgeoning Chinese middle class, Ma’s company handles more than $2.4 trillion of mobile payments every three months. Many of the company’s 870 million customers rely on it for nearly every aspect of their financial lives.

In February, Alibaba announced plans to buy a 33 percent stake that would give the e-commerce giant its first ownership of the affiliate since it was controversially spun out in 2011. Ant’s Alipay has been instrumental in driving Alibaba’s business and is increasingly employed in physical stores around the world, shadowing the movements of Chinese tourists. It’s now 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.

— With assistance by Sree Vidya Bhaktavatsalam, and Cathy Chan

(Updates with details about Ant’s financials.)
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