By Kelechi Decca
I have always been of the persuasion that the adoption of the name Ant by one of China’s biggest companies is a clear deception of humility.
Established in 2014 as a holding company to serve not only as the parent company to Alipay but also to other financial services, like loans and wealth management.
The company is said to have settled for the name Ant because according to its first CEO Eric Jing the company chose the small insect because it serves “the little guys.”
Well, not anymore, technically speaking.
The Ant Group is set to break the record for an initial public offering with a $34 billion haul. That’s just a billion dollars less than Nigeria’s foreign reserve of about $35 billion. Observers say that with that deep pocket, the disruptive capacity of Ant Group globally can only be imagined.
Though it is seen as a tech giant, technically Ant is one of China’s biggest banks, even without a single branch, and could pass as one of the world’s biggest financial powerhouses.
Yet it still pretends to be a tech company. That is the colour of things to come. Other tech giants such as Alphabet Group, Facebook, and Twitter are exploring with different apps.
If you care to know, Ant’s Alipay mobile payment service has more than 730 million monthly users. It handled over $17 trillion in digital payments in the year to June.
It also offers a mutual fund, insurance brokerage, and many other services. An indication of how expansive their financial operations are.
Comparatively, Alipay has more than twice the number of active accounts of PayPal, and it handled far more payments than the $712 billion that PayPal did last year.
Ant’s systems processed 459,000 payments a second at the peak of the Singles Day shopping holiday in China last November. By contrast, Visa says it can handle 65,000 transactions a second.
Ant’s I.P.O. valuation of $313 billion puts it in the same league as Mastercard ($319 billion) and JPMorgan Chase ($309 billion). Ant raised money privately in 2018 at a valuation of $150 billion.
Signposting China’s shift in capital, Ant’s shares will trade on the Shanghai and Hong Kong stock exchanges starting next week, following the trend of big Chinese tech companies choosing to list in their home country rather than in the U.S. Shanghai, Hong Kong and Shenzhen account for just under half of all I.P.O.s so far this year.
The company’s co-founder, the billionaire Jack Ma, said at the weekend that Ant’s debut would be “the first time that such a big I.P.O. was priced outside of New York City, which we wouldn’t have dared to think about five, or even three years ago.”
Even after Ant goes public, Alibaba will own a third of its shares, and Mr. Ma and other top executives will still control nearly 40 percent of the company.
Both the Shanghai and Hong Kong offerings were heavily oversubscribed, with retail and institutional investors clamoring for shares. The listing is also a fee bonanza for underwriting banks, which include Citigroup, JPMorgan, and Morgan Stanley.
To bring into perspective the shifting of big money to the East, with this IPO, it means that four of the world’s five largest I.P.O.s will be Chinese companies.
Keep searching for oil in the Benue Through and the Sahara Desert instead of investing heavily in human capacity development and creating an enabling environment to help your citizenry unleash their potential. Rather you’re busy arresting young people because they have laptops, dreadlocks, and tattoos.
Go to the ant, O sluggard; consider her ways, and be wise. (Proverbs 6:6 ESV).
