Ant Financial mega-fundraising leads sovereign investments in second quarter
Ant Financial mega-fundraising leads sovereign investments in second quarterAnt Financial’s record- setting US$ 14 billion funding round led sovereign investor transactions in the second quarter against a backdrop of rising interest in tech-related start- ups, although overall deal values fell slightly.
Singapore’s GIC and Temasek, and Malaysia’s Khazanah were among those participating in the Ant Financial round, the biggestever single fundraising for a private company.
Ant Financial operates China’s biggest online payments platform and was spun off from e-commerce giant Alibaba before it listed in 2014. The cash will boost Ant’s firepower ahead of a widely- expected initial public offering ( IPO).
“It is growing in the shadow of Alibaba which explains why we are seeing these big numbers,” said Javier Capape, director of the Sovereign Wealth Lab at IE Business School.
“They want to expand beyond payments, providing consumer finance and small loans. Investors believe this is a player that will grow beyond China’s borders.”
The mega-funding round boosted the overall value of the deals in which sovereign investors participated to some US$ 35.2 billion, according to Thomson Reuters data. This was just shy of the first quarter’s record US$ 40 billion, which was swollen by two massive transactions.
The second quarter saw a raft of investments in the tech space as sovereign wealth funds (SWFs) stepped up their efforts to find the next unicorn – a start-up valued at US$ 1 billion or more.
Qatar Investment Authority invested in Mesosphere, a hybrid cloud platform company, and Temasek invested in China’s facial recognition company SenseTime in April. The US$ 4.5 billion company is the world’s most valuable artificial intelligence (AI) unicorn.
Markus Massi, a senior partner at The Boston Consulting Group, said investors were getting more interested in AI as it had reached a stage where its potential value and uses were more apparent.
“You can make cases that AI helps you rationalise processes and increase productivity,” he said, adding that AI no longer needed a lot of data to learn as it was becoming more rules-based. This allowed machines to learn for themselves.
“That makes it faster, leaner and more applicable for different uses.”
Since March a number of SWFs have announced plans to set up dedicated funds targeting tech investments. Ireland’s Strategic Investment Fund and China’s CIC teamed up on a 150 million euro fund, while Mubadala is launching a US$ 400 million fund to invest in European tech companies.
Capape also cited a planned China-backed US$ 15 billion tech fund which he said was likely to attract SWFs, along the lines of SoftBank’s mammoth Vision Fund.
Other notable transactions in the second quarter included Temasek raising its stake in German pharma firm Bayer in a US$ 3.7 billion deal to help fund a takeover of seed-maker Monsanto.
Biotech companies also remained in favor, with Abu Dhabi Investment Authority investing in Kaleido Biosciences and GIC leading a US$ 260 million funding round for CStone Pharmaceuticals, which develops innovative drugs in immuno- oncology. — Reuters