The Ant Group's Botched IPO with Rui Ma

Dec 20, 2020

Rui Ma, creator of the Tech Buzz China podcast and venture partner at Synaptic Ventures, dives into the intriguing world of Ant Group's halted IPO. He explains the evolution of Ant from Alipay to a vast financial powerhouse and discusses its complex ownership structure. Listeners hear about the firm’s diverse offerings in payments, lending, and investments and the impact of recent regulatory changes. Rui also shares insights on the potential timeline for Ant's IPO revival and what it means for investors and the fintech landscape in China.

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INSIGHT

Credit Tech Powers Ant's Profit Engine

Ant's highest-margin growth comes from credit tech, not basic payments.
Credit tech supplies almost 40% of revenue and about half of profits through lending products.

ANECDOTE

Products Built On Zhima Credit Scoring

Zhima Credit scores users and powers products like Huabei and Jiebei for consumer credit.
MyBank (30% owned by Ant) offers instant small-business loans with automated underwriting.

INSIGHT

Rebrand To Capture Tech Multiples

Ant rebranded from Ant Financial to Ant Group to capture higher tech valuations.
Positioning as a tech firm aimed to avoid heavy bank-style regulation and gain richer multiples.

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In episode 337, Rui Ma from TechBuzz China podcast joined us in a conversation to break down what just happened to Ant Group's IPO and why it was halted at the eleven hour by the Chinese government. At the start of the conversation, Rui Ma shared the back story and explained how Ant Financial have built their business from the escrow and payments app to now a vast financial business with lending and investment services included. Last but not least, Rui Ma dived deep into the regulatory landscape and offered the different scenarios to when Ant Group might be able to IPO in the future.

Here are the interesting show notes and links to the discussion:

Rui Ma, Creator & Host of Tech Buzz China podcast by Pandaily produced by SupChina (LinkedIn, @ruima)
- Since our last conversation in April 2020, what have you been up to?
Ant Group and why China slams the brakes on their IPO
- Before we start talking about the IPO, let’s understand the company a little bit more. Can you talk about how Ant Group was initially started as Alipay by Jack Ma and then became Ant Financial? I believe there was a huge controversy about the founding of Alipay as well right?
- What is the current ownership of Ant Group like and who are the key stakeholders?
- Can you talk about the many branches of business that they offer and how these businesses are structured? For example, the lending & investment business?
- Alipay is just one of the different products which sits within Ant Group. There are other products, for example, Zhima Credit, Huabei, Jiebei, MYBank, Ant Insurance, etc. Can you talk about how these products are organized by the different businesses within Ant Financial?
- Ant Financial changed their name to Ant Group in June 2020 wanting to stress that they’re not just a finance company but a tech company. Why do you think they wanted to shift away from this kind of branding and do you believe in this rhetoric?
- How has Ant Financial worked within the regulatory landscape in the financial services sector in China?
- But as we all know, one day after the US Elections on Nov 4, the Chinese government halted the IPO. What happened and what is the current status of Ant IPO?
- If the Ant IPO did take place, what would have been the prospects of growth for the company?
- What are the implications of Ant Financial’s botched IPO towards the Alibaba Group?
- Do you think that they will be going public in the next half a year or beyond?
Closing
- Can you recommend something that has inspired you recently?
  - Rui Ma's recommendation: Esther Perels, Where Should We Begin podcast
  - Where can my audience find you?

Podcast Information:

The show is hosted and produced by Carol Yin (@CarolYujiaYin) and originally created by Bernard Leong (@bernardleong, Linkedin). Sound credits for the intro music: Taro Iwashiro, "The Beginning" from Red Cliff Soundtrack.

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