Sources: Ant Financial, the fintech affiliate of Alibaba, is preparing to raise $9B in a private funding round at a valuation of almost $150B
Latest funding round could value the financial technology firm at close to $150 billion — Chinese billionaire Jack Ma's financial-technology business …
Context & Ripple Effects
Ant Financial's valuation has roughly tripled in three years of private fundraising: it was worth an estimated $45B-$50B after its 2015 round, then closed what was then the world's largest private round for an internet company — $4.5B at about $60B — in April 2016.
The new $9B target at almost $150B formalizes the escalation signaled in February, when reports had Ant planning up to $5B at a $100B-plus valuation in what was widely read as pre-IPO fundraising. The round would hand late-stage investors a stake in China's dominant payments franchise on the eve of a likely public listing.
First-order effects
- Investors entering this round pay roughly 2.5x the price per share implied by the 2016 round, while existing backers see paper gains that reset the mark for every other holding in Chinese fintech portfolios.
Second-order effects
- A near-$150B private benchmark pressures rival Chinese fintech and payments players to raise at inflated comparables or accelerate their own listings before Ant's IPO reprices the sector downward if it disappoints.
Third-order effects
- If the pattern holds — mega-rounds swelling from $4.5B to $10B between 2016 and the eventual close — Chinese internet giants will keep deferring IPOs by tapping private capital at escalating marks, concentrating late-stage upside among a small set of funds able to write nine-figure checks.
The trend: China's leading internet franchises are compounding their valuations through ever-larger private rounds ahead of IPOs, with each close resetting the ceiling for the next.