Yahoo Finance Rival to Jack Ma’s Ant Seeks Pre-IPO Funding at $3 Billion Value
(Bloomberg) -- LianLian DigiTech, a rival to Jack Ma’s Ant Group Co., is in talks to raise as much as 1.5 billion yuan ($223 million) ahead of an initial public offering in Hong Kong as soon as next year, people familiar with the matter say.
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The Hangzhou-based startup is working with China International Capital Corp. on the financing round, the people said, asking not to be identified as the information is private. Investment vehicles under the Zhejiang provincial government and a venture arm of China Mobile Ltd. have expressed interest in participating, one of the people said. The fundraising will likely take LianLian’s valuation to about 20 billion yuan, the person said.
A successful deal could usher in one of the few IPO attempts by a major Chinese fintech company since regulators scrapped Ant’s debut in 2020, which would have been the world’s largest. That triggered a crackdown that engulfed most of the country’s internet sector. Months after Ant halted its IPO, JD.com Inc. founder Richard Liu’s fintech unit also withdrew its listing application from China’s NASDAQ-style Star Market.
Once new investors are on board, LianLian plans to seek a Hong Kong IPO next year followed by a mainland Chinese listing, the people said. The firm, which specializes in cross-border payments for e-commerce giants including Amazon.com Inc. and Sea Ltd.’s Shopee, is currently valued at roughly 16 billion yuan, they said. It counts major names such as Sequoia Capital China, Boyu Capital and China Everbright Industries Group Ltd. among its backers and has handled more than 5.5 trillion yuan in transactions since its 2009 founding, according to its website.
Read more: China Weighs Reviving Jack Ma’s Ant IPO as Crackdown Eases
Discussions are ongoing and preparations for the listing are at an early stage, so details are subject to change, the people said. LianLian representatives didn’t respond to calls and inquiries sent through their business development hotline. A China Mobile representative didn’t respond to requests for comment.
Requests for comment sent to phone and fax numbers and a general email address listed on the Zhejiang investment agency’s website either went unanswered or bounced back. The Zhejiang government’s foreign affairs office, which often deals with international media, didn’t respond to an email requesting comment.
LianLian’s fundraising talks show investors haven’t ruled out fintech as a promising area, despite the clampdown on Ant and intensified scrutiny of online finance services run by the likes of Tencent Holdings Ltd. Chinese financial regulators have started early-stage discussions on a potential revival of Ant’s listing, Bloomberg News has reported, one of the clearest signs yet that authorities are dialing back a crackdown on the industry.
Under an official framework laid down last year, Ant needs to fold all its financial units into a holding company and be regulated like a bank with more scrutiny on its shareholder structure and tougher capital requirements. The central bank has so far accepted five applications for financial holding firms, and approved two after at least six months of review.
Founded in 2009, LianLian provides bankcard clearing services through a joint venture with American Express Co. and also offers cross-border payments for more than a million e-commerce merchants, according to its website. It has expanded to Southeast Asia, Ireland and Brazil, the company says. At home, it competes with far larger rivals including the state-backed UnionPay network as well as apps operated by Ant and Tencent.
In 2021, LianLian filed pre-listing supportive documents endorsed by CICC to mainland market watchdogs, revealing very early preparations for an IPO, though it’s unclear why the payments firm didn’t proceed with a listing.
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