Alibaba's Ant Financial to delay IPO in favor of expansion

Dive Brief:

Ant Financial, the $60 billion online financial services arm spun off by Chinese e-commerce giant Alibaba, has delayed an initial public offering until at least late next year so it can continue to grow its business, Reuters reports.
Sources told Reuters that Ant plans listings in China and Hong Kong; Alibaba held its own blockbuster IPO in 2014 on the New York Stock Exchange. An Ant spokesperson told Reuters there was no timetable or location for any listing, and the China Securities Regulatory Commission did not comment.
"We will be looking at an IPO in the next few years; we are not yet sure where we will list or when exactly," Alibaba founder Jack Ma said this week, according to Reuters.

Dive Insight:

Ant Financial started off as a PayPal-like service known as Alipay developed to smooth e-commerce transactions in China, which has a robust e-commerce space that is more mature than its counterparts in the U.S. or Europe. Alibaba spun off the payments unit and renamed it Ant Financial ahead of its own IPO two years ago.

In addition to online payments, Ant Financial now offers financial services like insurance, credit scoring, loans and money management services. Last month, Ant acquired biometric authentication enabler EyeVerify for about $70 million: EyeVerify's EyePrint ID technology checks identities through eye-vein patterns, and Ant, which began using EyePrint on its transaction authentication platform earlier this year, plans to integrate the tech into more of its products.

Ant enjoys 450 million daily users (including sellers and buyers), and boasts a $60 billion valuation as of its latest funding round this spring. The company raised $4.5 billion in a record funding round in April, backed by China's sovereign wealth fund China Investment Corp and a subsidiary of China Construction Bank, and is profitable.

That’s in contrast to Alibaba itself, which some analysts have said may not be profitable — moreover, it’s difficult to tell because of what they say is dubious reporting methods. Not even its past rosy results have been able to assuage some analyst skepticism about the company's profitability. Kynikos Associates founder Jim Chanos, for one, told CNBC in May that he’s doubtful about Alibaba's cash flow and questions the company’s own metrics. "We just don't see how profitable or unprofitable that business is," he said.