Alibaba’s finance arm valued at $50 billion in new funding round

Image by TiA. Photo of Jack Ma originally from VG Photo Studio

Is Alibaba’s online finance arm, Ant Financial, worth US$50 billion? That’s the valuation investors have put on the company in its latest round of fundraising. According to a new report in the Wall Street Journal, the company is in the midst of raising a new US$3.1 billion funding round, which it’s expected to close in mid-April.

The round reportedly includes both old and new investors. Ant Financial will likely use the cash infusion to fund another round of acquisitions and investments. The company already owns stakes in everything from Chinese tech media company 36kr to Indian e-payment service Paytm, and with another few billion in the war chest it can look to double-down on existing investments and branch out into new territory.

Ant Financial isn’t a part of Alibaba at all

Ant Financial isn’t the global household name that Alibaba is, but perhaps it should be. It is Ant Financial that controls and operates Alipay, Alibaba’s massively-popular epayment system. Ant Financial also runs Alibaba’s Yuebao online money market fund, and has a stake in virtually all of Alibaba’s online finance ventures. It’s rumored the company is planning an IPO of its own – possibly on the Chinese market – as early as next year.

Technically speaking, Ant Financial isn’t part of Alibaba at all. Jack Ma controversially spun the company off back in 2011, separating it from the Alibaba Group. But Ant Financial is nevertheless hugely important to Alibaba’s bottom line, because the two companies have an agreement that gives Alibaba 37.5 percent of Ant Financial’s pre-tax profits. And if Ant Financial does IPO, Alibaba would be due to receive up to 37.5 percent of that windfall, too.