Ant Consumer Finance Arm to Raise $616 Million for Growth

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(Bloomberg) -- Ant Group Co.’s consumer finance affiliate is raising 4.5 billion yuan ($616 million) from investors to revive growth after regulators wrapped up a multi-year crackdown on the Jack Ma-backed financial technology giant.Most Read from BloombergChina Puts Evergrande’s Billionaire Founder Under Police ControlElon Musk Wins US Space Force Contract for StarshieldLululemon Strikes Deal With Peloton for Fitness Content, Will Ax Mirror DeviceCitadel Is Ready to Fight With SEC Over WhatsApp

Ant Group will contribute 2.25 billion yuan to the plan while other investors include Sunny Optical Technology Group Co. and Transfar Zhilian Co., according to exchange filings on Thursday. Chongqing Ant Consumer Finance Co. registered capital will increase to 23 billion yuan, pending regulatory approval.

Authorities ended an almost three-year long probe into the fintech giant by imposing a nearly $1 billion fine in July. Ma’s run-in with Beijing has cost his empire — including Ant and Alibaba Group Holding Ltd. — billions of dollars in lost valuation, including what would have been the largest initial public offering in history.

Chongqing Ant combines the group’s most lucrative online lending operations, called Huabei and Jiebei . The division has been crucial in driving growth at Ant’s digital finance business, which contributed 63% of the firm’s revenue in the first half of 2020 before the authorities unleashed a barrage of rules.

Ant will continue to hold 50% of the consumer finance company. It will have an estimated lending capacity of as much as 620 billion yuan, according to Bloomberg calculations. The fintech company has been trying to beef up its development in AI and its large language model and create new pockets of growth. Ant’s profit the quarter ended in March rose 17%, the first signs of improvement after the yearslong regulatory crackdown.

 

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