Alibaba’s subsidiary company Ant Financial confirmed today that it closed a Series A funding round which includes investment from China’s largest pension fund, the National Social Security Fund (NSSF). The deal was previously reported by Bloomberg.
While it isn’t a traditional Series A — because most startup aren’t formed as an offshoot from a multi-billion e-commerce juggernaut — the deal is eye-watering. Ant Financial said the undisclosed round included capital from “major Chinese insurance corporations” and other investors. TechCrunch understands from sources close to Ant Financial that it values the company at $45-$50 billion.
The investment from NSSF — which we hear included a substantial discount — brings on an interesting strategic investor. China’s government recently relaxed regulations on how the fund can invest, and this deal with Ant Financial is the first such investment that NSSF has undertaken since that loosening. It’s also a huge validation for the business, and could help Ant Financial with legal and regulatory hurdles in the future.
Ant Financial, which was spun out Alibaba before the e-commerce firm’s blockbuster U.S. IPO last year, operates a series of financial businesses focused on helping the “small guy”. Its roster of services — which it claimed are used by 400 million active users — includes Alipay (the online payment services that handles three times the volumes of PayPal), investment service Yu’e Bao, online credit scoring service Sesame Credit, loan programs and newly-launched digital bank MYBank. The company added that its micro loan scheme has lent some 400 billion CNY ($65 billion) to over 1.6 million SMEs and entrepreneurs to date.
In addition to those services, Ant Financial recently moved into online-to-offline and logistics when teamed up with Alibaba to plough nearly $1 billion into a new joint venture called Koubei.
Now it is looking overseas too, after confirming plans to offer financial services outside of China. The company has already invested outside of its home turf — it bought a 25 percent stake in India’s Paytm, in a deal valuing the payments firm at over $1 billion — and that could continue following this Series A round.
Ant Financial isn’t alone in taking a Chinese tech giant’s empire from commerce and internet services into digital finance. Rival Tencent offers a digital bank of its own and provides financial services, while fellow e-commerce firm JD.com recently partnered with U.S.-based ZestFinance to offer micro loans to SMEs and entrepreneurs in China.