RNT Capital Advisors, Ratan Tata’s investment firm (which is also backed by the investment arm of the University of California), has most likely invested $150 million (about ₹1020 crores) as part of a mega financing round in the leading Chinese digital payments company, Ant Financial Services.
Founded by Chinese ecommerce giant Alibaba Group, Ant Financial Services, based in Hangzhou in the Chinese province of Zhejiang, still identifies itself as an affiliate of Alibaba, and is known for its digital payments brand, Alipay.
Established in 2004, Ant Financial’s online mobile payments service provider, Alipay, took over Paypal, as the largest digital mobile payments company. Today, 400 million users worldwide are reported to have used Alipay against 210 million users of Paypal. WeChat Pay with 600 million users is currently the largest online mobile payments platform in the world.
Ant Financial Services had raised $4.5 billion (about ₹30,600 crores) in Series B funding at a valuation of $60 billion (about ₹4 lakh crores) in April 2016, which saw participation by China Investment Corporation, China Development Industrial Bank, Primavera Capital Group and CCB International.
In this round of $14.5 billion (about ₹98,600 crores) Series C funding, the investors include Singapore-based sovereign funds GIC and Temasek, Malaysian sovereign fund Khazanah Nasional Berhad, Warburg Pincus, Canada Pension Plan Investment Board, Sequoia Capital, Carlyle Group, Silver Lake Partners and General Atlantic. The financing round includes an RMB/CNY (Chinese Yuan) tranche raised from domestic Chinese investors and a US$ tranche of over $10 billion from international investors.
This is the single-largest fund raise by any company in history.
Since Ant Financial is estimated to be valued at about $150 billion (about ₹10 lakh crores), RNT Capital Advisors, the sole Indian investor participating in the round, will get about 0.1% of the equity.
According to a statement by Ant Capital, the funds raised will be used to accelerate Alipay’s globalisation plans and invest in developing technology to further enhance the company’s ability to deliver inclusive financial services to unbanked and underbanked consumers and small enterprises globally. In addition, the capital will be used to cultivate high-tech talent in emerging markets to help communities take advantage of the opportunities arising from digital transformation.
The Executive Chairman and CEO of Ant Financial, Eric Jing, had these comments about the funding: “We will continue to invest in technology and innovation in order to serve unmet financial needs of people everywhere and to enable them to benefit from the development of the digital economy.”
According to the World Payments Report 2017, global non-cash volume during 2014-2015 increased at 11.2%, beating all predictions.
While India benefited immensely from demonetisation with digital payments companies such as Paytm and Razorpay registering a 10-fold growth, in the following year, the growth has slowed down due to various reasons, including the RBI’s decision to make digital payments wallets fully KYC-enabled.
Ratan Tata, after his retirement in December 2012 from the executive chairmanship of India’s largest MNC, the Tata Group, has invested in about 48 startups. His portfolio includes PayTM, Ola Cabs, Xiaomi, Axio Biosolutions, CureFit, Aditazz, Infinite Analytics, LetsVenture, Tracxn and Human Longevity.
This investment by Mr. Tata in Ant Financial is his second largest till date, after the ₹2200 crores he invested in Ola Cabs.