FinTech company Ant Group continues to press toward having the biggest initial public offering (IPO) ever, with returns at an estimated $35 billion. Ant Group is the online payment affiliate of China-based Alibaba Group Holding.
In its latest IPO move, Ant Group is looking to turn millions of its Alipay users into investors, The Wall Street Journal reported. To get users to invest, the company launched an advertising campaign that included everything from live-streamed online discussions with investment professionals to ads at bus stops.
To buy into Hangzhou-based Ant Group’s IPO, investors put their cash into five new mutual funds — sold on Ant’s payments platform — that raised $8.96 billion. One downside to the unusual arrangement is that the individual investors had to lock up their money for 18 months, the Journal reported. An upside: Small investors are allowed to get on board.
The five funds were handled by top investment firms in China, which had signed agreements with Ant to buy shares in the company’s planned IPO — and hold onto them for at least a year. Each of the funds said it could invest up to 10 percent of its assets under management into Ant’s IPO, the Journal reported.
The IPO is still awaiting regulatory approvals before its launch.
Ant Group gets most of its revenue from consumer loans made on the Alipay payments app. It also operates money market funds and sells insurance, along with providing credit scores and tech services to companies operating in the finance industry.
According to the company, Alipay has more than 711 million users per month, mostly in China, with customers using the app to pay for everything from coffee to real estate.
In September, Shanghai regulators approved Ant Group’s request to proceed with its IPO share sale. The company is also seeking to be listed on the Hong Kong Stock Exchange.