It had been rumored for some time now. Ant Financial, the Chinese financial behemoth, was raising a very large funding round that would value the company at $150 billion. It has been reported extensively today that this funding round has in fact closed. Ant Financial has raised $10 billion at a $150 billion valuation.
For a brief primer on Ant Financial there is a decent summary on their English language website but for a deeper understanding I recommend you read Chris Skinner’s new book, Digital Human (the Kindle version is available now). This has a 30,000 word case study that not only shares the history of Ant Financial but also why they are one of the world’s most forward thinking companies. And if you think they are just a Chinese story, think again. Ant Financial embodies the future of financial services and they will, in my opinion, shape the future of financial services more than any other fintech company on the planet.
Having said that, calling Ant Financial a fintech company is a bit like calling Amazon an e-commerce company. Ant Financial is a fully diversified financial services firm with payments (AliPay), wealth management (Yu’e bao is the largest money market fund in the world), lending, insurance and even a credit bureau. They look more like a banking conglomerate than a fintech company.
It is actually very interesting to compare Ant Financial to the leading global banks. Over the weekend I read this piece in Disruptive Finance (written before the news broke this morning) that compared the market capitalization of the largest banking groups in the world. The author, Huy Nguyen Trieu, pulled together market cap numbers that I shared in the graphic above. Every other organization on that list has roots going back decades, some even centuries. Ant Financial is the only company that was started in the 21st century.
Ant Financial is planning what may well become the largest IPO in history, eclipsing that of its former parent company, Alibaba. That company raised $21.77 billion back in 2014 debuting with a market value of $168 billion. It is quite possible that Ant Financial could eclipse that valuation and we will find it moving up the top 10 list above.
Who would have thought ten years ago that in 2018 the largest companies in the world by market cap would be Apple, Google and Amazon. I expect in ten years time we will see a very different list of the ten most valuable banking groups in the world.