The Chinese fintech firm Ant Group has been given a valuation of over $200 billion based on its 2020 performance by some of the global investors of the company, claimed a report published by the news agency Reuters.
That was a more sober estimate for the company’s valuation following the suspension of its IPO and forced restructuring.
This latest estimate of the company’s valuation is about one third higher than the firm’s valuation after its last round of fundraising in 2018 when it was tagged the most-valuable unlisted tech firm of the world. The number however is still well below the valuation of $315 billion as was touted by the company prior to the now scuttled IPO and would have been the largest ever public listing of the world.
Days ahead of Ant’s November listing, regulatory scrutiny scuppered the $37 billion initial public offering (IPO) which crashed hopes of investors of a huge windfall. According to sources and analysts, the restructuring of the company as a financial firm instead of the etch firm under pressure from Chinese regulators has brought down the valuation of the company as financial companies tend to have a low market valuation than tech companies.
According to the report quoting an investor there was little impact of the regulatory scrutiny on the business of Ant in the October-December quarter. However the valuation of the company was revised for the Alibaba Group Holding Ltd affiliate and the company has to wait some more time for a public listing until the restructuring is completed.
According to the Reuters report, based on 2020 earnings and comparable company analysis, Ant was valued at about $220 billion at year-end by Warburg Pincus LLC, said sources. The report also said that part of its stake in the Chinese firm was sold by the United States based private equity firm last year for $90 million at a valuation of $190 billion in a private trade.
The report quoted another investor who said that its estimate of the market valuation of Ant was not very different from that of Warburg based on the latest financial figures of the Chinese firm.
After pressure from the Chinese regulator to subject it to rules that are followed by banks and financial institutions, its corporate structure is being changed by Ant to that of a financial holding firm.
In 2018, when Ant raised $14 billion at a valuation of about $150 billion in the largest single fundraising of the world, the Hangzhou-based financial technology giant was regarded as a tech firm.
Investors in that funding round included private equity firms Warburg, Carlyle Group Inc, General Atlantic and Silver Lake Partners LP, plus Singapore sovereign wealth fund GIC Pte Ltd and existing shareholders Boyu Capital and Primavera Capital Group.
The valuation of Ant increased to about $315 billion, or over 31 times its forecast 2021 net profit at its IPO pricing.
(Adapted from Reuters.com)