FinTech: Ant’s Chongqing Consumer Finance Arm Raising $616M To Ramp Up Loans
Chongqing Consumer Finance raised about $1.5 billion last year.
Chongqing Consumer Finance, the consumer finance arm of Ant Group, a prominent player in China’s financial technology landscape, is currently in the process of raising a substantial sum of fresh capital. Approximately $616 million is being sourced from the company’s existing shareholders and one new investor, marking a strategic move to bolster its financial capabilities.
Chongqing Ant Consumer Finance, established in 2021 with the specific purpose of overseeing Ant’s personal lending operations, had already successfully secured a significant funding round, amassing approximately $1.5 billion in capital less than a year ago. This funding came from a diverse group of contributors, encompassing both state-owned entities and private investors who recognized the potential of this fintech venture. (WSJ)
The recent announcement from one of the unit’s shareholders reveals that the registered capital of Chongqing Ant Consumer Finance is poised for a substantial increase, surging to approximately $3.1 billion following the infusion of fresh capital. This significant financial boost is expected to fortify the company’s ability to extend loans to Chinese consumers, thereby fueling economic activities and meeting the financial needs of a wide range of individuals.
Ant Group will continue to hold a substantial 50% ownership stake in this venture, underlining its commitment to the consumer finance sector. Additionally, this ownership structure will see participation from 12 investors, including subsidiaries of the renowned Chinese tech giant NetEase (HKG: 9999) and the well-established electronics components manufacturer Sunny Optical Technology (HKG: 2382). Notably, the newest addition to this roster of stakeholders is a state-owned enterprise hailing from Chongqing, further diversifying the investor base.
Ant Group, which boasts a one-third ownership by the Chinese internet giant Alibaba Group (HKG: 9988), is notably responsible for the operation of Alipay, a widely-used mobile payments platform that has become an integral part of daily life for millions of users in China.
This fintech giant, spearheaded by Chinese billionaire Jack Ma, embarked on a transformative journey after the cancellation of its high-profile IPOs in 2020. This transformation entailed restructuring the business into a fully regulated financial institution, reflecting the evolving regulatory landscape in China. In a significant move, Ant Group announced last year that Jack Ma would relinquish his shareholding control as part of its ongoing efforts to align with regulatory requirements and ensure the stability and integrity of its operations.
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