Tech Ant Financial

Alibaba’s Finance Arm Ant Financial Valued at $60 Billion

By

Leena Rao

By

Leena Rao

March 7, 2016, 1:17 PM ET

Chinese retailers idle in empty malls as shoppers go online

Young Chinese students play electronic games at a stall in an empty electronics mall in Zhongguancun, Beijing, China, 22 January 2015. Hunched over the counter of his tiny, gadget filled stall in Beijing's vast Hailong Electronics City, Wang Ning bemoans a week without a single sale. "It's dying," says Wang, shaking his head as he looks out at abandoned stores and torn promotional posters in what was once the busiest market in the Zhongguancun district, known as China's silicon valley. "There are more sales staff than customers around here. Everyone buys online now." The six football-field-sized floors are dotted with shuttered shops, victims of the rise of Internet-based businesses like Jack Ma's Alibaba Group Holding Ltd. and billionaire Richard Qiangdong Liu's JD.com, which started out in Zhongguancun almost two decades ago. The online revolution promises to boost productivity and could create 46 million new jobs in China by 2025, many of them higher-skilled, according to a report by New York-based McKinsey & Co. in July. The losers will be as many as 31 million traditional roles, the equivalent of the entire employed population in Britain. While such creative destruction is a global phenomenon, its speed and scale in China is unparalleled, said Cao Lei, director of the China E-Commerce Research Center, a private research agency based in Hangzhou, the hometown of Alibaba. "The Internet helps improve productivity and efficiency, but it can be quite painful for traditional businesses,” Cao said. "Bookstores fail first, then clothing chains, then consumer electronics stores, then air-ticket booking offices, and in the future, bank branches and other traditional services facilities may fail."Photograph by Song jiaru — Imaginechina/AP

Ant Financial, the Alibaba (BABA) spinoff that operates popular Chinese digital wallet Alipay, is raising a new round of funding at a $60 billion valuation, according to Reuters.

The Wall Street Journal reported that Alipay is seeking to raise as much as $3 billion in new funding.

Alipay is a digital wallet that shoppers—most of them in China—use to buy products online, on their phones, and even in stores. With 400 million registered users, it is almost triple the size of its U.S. Rival, PayPal.

As Ant Financial’s U.S. Chief toldCoins2Day in 2015, Alipay’s mobile app helps you do everything you need to do financially including shopping online, paying for an Uber, buying a plane ticket, or even paying your electricity bill. Many physical stores in China also accept Alipay.

On China’s busiest online shopping day, known as Singles Day, on Nov. 11. 2015, Alipay processed $14.3 billion in sales by Alibaba.

For more on Alibaba, watch this video:

Ant’s business also includes money market funds. Ant Financial was valued at $40 billion in its last round of funding, and was reportedly eyeing a 2016 IPO.

Ant Financial could be readying a war chest to fend off competition from Apple (AAPL), which just debuted its rival mobile payments service in China in February. But Alipay still has a strong foothold in China, with 50% market share in mobile payments. Chinese Internet giant Tencent (TCEHY) holds 20% share.

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