With FriendsLike These, Who Needs Bankers? Not Ant

Congratulations, Ant Financial,   on raising $14 billion . I’ m happy for you.

It’ s not like Jack Ma’ s i9000 payments and financial-services baby requirements the money. The startup  is already lucrative (well, not in the latest quarter), and has its tentacles throughout the Chinese language economy.

That didn’ t  prevent the likes of Warburg Pincus LLC, GIC Pte., Temasek  Holdings Pte. and  Silver Lake Management LLC through piling in with  more. Along with Ant being profitable, not  actually needing the cash, and still getting financed, it' s  as though an B?RSEGANG (?STERR.) isn' t even warranted.

Big Ant

Jack Ma' s Ant Financial has been rewarding for a while

Source: Alibaba, Bloomberg Opinion calculations

The danger with this kind of mega-fundings is that  big many through a public exit become more difficult. Xiaomi Corp. is an instance:   A $65 billion anticipated valuation upon an IPO this season is a tidy 40 percent benefit from recent private-funding valuations, yet that' s hardly the kind of return  VC investors often seek.

Reducing returns on investment are sure to weigh  on the  $14 billion that will Ant Financial announced Friday. Yet those VCs still need a good exit at some point.

Get into Beijing.  

Get into SOEs, to be exact. Just as state-backed funds figured prominently in Foxconn Industrial Internet Co. ’ ersus IPO earlier Friday,   also could they be a major pressure for Ant.

King of the Unicorns

A documented $150 billion valuation would give Ish more than twice the heft associated with any other startup

Resource: Bloomberg Opinion

China’ s i9000 government is concerned about the financial plus systemic risks that surround Ish, yet it must also be very impressed with how far the fintech  startup has come in such a short time. That could make state-linked funds the ideal applicants to take some of those Ant shares from the hands of VCs as an B?RSEGANG (?STERR.) approaches.

By selling back to Alibaba  Team Holding Ltd. and state-backed money, VCs would get their exits while not having to worry about an IPO in which they' d be subject to lockup plus liquidity challenges anyway.  

A Hong Kong IPO will most likely still happen. But the exit stress would be alleviated by full, or even more likely partial, sales to proper investors.

Foxconn  allotted 3 percent of FII’ h shares to strategic investors in the IPO as part of a broader intend to curry favor with Beijing. The particular free float was a mere five. 7 percent. Those funds had been handsomely rewarded by a 44 % gain  when the shares opened Fri in Shanghai.   Since lockups span 12 months to 18 months, there’ s every chance that FII will have a nice rise over the the coming year, thanks to government backing.

That’ s the kind of support Ish could do with when it will eventually list.

Lots of money has already been delivered by VCs,   so an Ant B?RSEGANG (?STERR.) will be less a fund-raising event  and more a coming-out party. Plus with  Beijing as co-host, lenders won’ t be so important pertaining to sending out invitations.

This line does not necessarily reflect the viewpoint of the editorial board or Bloomberg LP and its owners.

To contact the author of this tale:
Tim Culpan at tculpan1@bloomberg. net

To contact the particular editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg. net