Alibaba Affiliate Ant Financial Invests $30 Million In China Zheshang Bank IPO

Ant Financial Services Group has invested a sum of $30 million in the Chinese bank along with other 4 cornerstone investors to help the Zhejiang based bank.

In Hong Kong, the first huge IPO in 2016 is being launched with Alibaba’s financial partner Ant Financial cornerstone investment amongst those making the way. An IPO was launched by China Zheshang Bank Company with an amount of $984 million in support from 5 cornerstone investors, including $30 million invested by the Chinese e-commerce company’s financial affiliate.  

It is Ant Financial’s first cornerstone investment, which runs the Chinese topmost online service provider in terms of users, Alipay. The Zhejiang based bank looks to receive $1.75 billion, turning its IPO the first one in the region to cross $1 billion figure in 2016. An unstable stock market slightly up from its decline in February and January, but down 6.75% in 2016, has made investors careful of pledging capital to fresh offerings

Investors pledged funds to public offering at the offering price but are bound to hold the stock for a specific period after the stock begins trading. Enlisting funds is a way to provide confidence to the rest of the investors. In case of the bank, the huge commitments raised the bar of IPO from the previously planned sum of $1 billion.

Less than 12 IPOs this year have been hosted in Hong Kong, which have raised a cumulative $853 million, compared to a sum of $1.3 billion and 19 IPOs at this point last year, revealed by Dealogic data. This year’s to-date is smallest since 2011.

The most valued internet finance company of China, Ant Financial is raising $3.1 billion (20 billion Yuan) in this present financing round from a group of existing and new investors, as recently reported by WSJ. The rounds, which pushes its value at a sum of over $50 billion, will probably end up by April 15 2016, revealed by people aware of the situation.

The rest of the cornerstone investors in the IPO of the Chinese bank include state-owned  Zhejiang Provincial Seaport Investment & Operation Group, brokerage service provider ‘Shenwan Hongyuan’ and Chinese investment company ‘Shaoxing Lingyan Equity Investment Fund Partnerships’, the term sheet revealed.

Chinese organizations are continuously seeking cornerstone investments from friendly Chinese investors, which have raised the question that whether Hong Kong has lost the conventional role to connect global investors along with their tighter scrutiny with Chinese companies.

On March 15, 2016, Bank of Tianjin is also launching an HK IPO as it seeks to raise a sum of $1.23b, as revealed by IPO prospectus; Bank of Tianjin secures a total sum of $560m from 7 Chinese cornerstone investors, according to the prospectus.

Ant Financial previously collaborated with the online trading company to purchase a share in AGTech Holdings for $308 million. AGTech is a lottery company listed in Hong Kong.

Alibaba Signed $3 Billion Loan Agreement With Eight Lead Arrangers

Alibaba signed the loan agreement for more acquisitions in Asia.

Alibaba is interested in more acquisitions. The recent investment spree of the Chinese e-commerce company including the ongoing $3.5 billion worth acquisition of Youku Tudou and shares in Snapchat, Snapdeal, PayTM and Groupon will get new ammunition following the confirmation that the Hangzhou based company has signed a $3 billion loan.

The confirmation of deal is not unexpected as the Wall Street Journal reported negotiations with banking organizations in the last month but the cumulative figure announced on March 10, 2016 less than $4 billion.

From the SEC filing, today Alibaba has signed a 5-year $3 billion syndicated loan deal with a group of eight lead arrangers and the proceeds of loans will be used for general corporate purposes. It is not precisely clear what “general corporate purposes” may mean – Tech Crunch asked the company to provide it’s further details of plans – but M&A activity looks highly probable since Alibaba has recently boosted its efforts to invest money.

Media is a significant focus for the company as admitted by Joe Tsai who serves as the Vice Chairman of Alibaba after it bid for the biggest video portal of China, Youku Tudou. Joe said services such as Youku Tudou, which has claimed viewership on a monthly basis of more than 500 million people, and Weibo, another investment of the organization, can let it extend its advertising and user analytics reach to increase marketing and sales.

Other investments fitting inside the focus may be on the cards. Outside its local business, the market of India is where the organization is quite active. President of Alibaba Jack Ma often talks of the vast potential of India, which is the reason behind its investment of millions of dollars into the leading startups of the country.

PayTM, which provides e-commerce and mobile wallet facility, is one that has been supported by Alibaba. Apart from the two investments, it started to bridge its owned e-commerce facilities, including PayTM, enabling merchants in the Chinese region to reach the huge population of India and Indian buyers to purchase Chinese goods in a convenient manner. However, Alibaba is not relying on one company.

It invested money in Snapdeal and in 2016, according to reports of Indian media, it negated to purchase a share in harsh competitor Flipkart. It will be interesting to find out if the borrowed cash will be injected into Flipkart as that would let the organization support three largest companies that compete with Amazon in the Indian region.

In other news, Bloomberg reported Alibaba, along with its partners, has decided to provide Internet services to China’s largest gas and oil producer, China National Petroleum Corporation (CNPC).

The deal of the organization covering cooperation on online finance, mobile payments, and cloud computation – will enable it to tap into a network of CPNC’s 20,000 gasoline stations. 

Alibaba To Fund American Company, Magic Leap

Magic Leap, which is working on virtual reality has been funded by the online retailer to expand to China

Alibaba Group Holding Ltd.is backing an American company. The Florida based tech startup Magic Leap which is making efforts to develop a new type of augmented reality, announced yesterday that it has received $793 million in a financing round led by the Chinese e-commerce company. A number of other companies have also invested in the organization including organizations like Morgan Stanley, J.P Morgan and Fidelity.

Investors like Qualcomm and Google have also invested heavily. CEO of Magic Leap Rony Abovitz has referred to their investment as “strong and deep reinvestments" in the organization. During David Liosky’s call, he could not help but question Rony: Why have you made an announcement in the current situation where the company that have touted for rising up the unicorn leaderboard turned themselves to a larger target?

"We do have certain Delaware filings to update and people will and have go through them and write the wrong things, just a bunch of speculation. We don't want a bunch of misinformation flying around. If there was a way to raise this kind of capital and not talk about it in any way, that would have been nice. As a company, we're heads down and want our first product to speak for us."

Rony was particularly excited to make an addition of Alibaba as a partner as  he believes that the partnership with the online retailer would help Magic Leap enter the Chinese market. The financing announcement is also representing Rony’s debut and new name of the technology pioneered by Magic Leap:  "Mixed Reality Lightfield." Rony has explained, in a coy manner, why he had a feeling that the organization needed to break the virtual reality- Augmented reality box that the enterprise was regularly putting in.

So how will $793.5million help the startup bring regarding the new reality. Rony has quickly noted that most of the $542 million received by the enterprise haven’t been disbursed.

Those funds have earmarked to move the US company from its technology phase to the phase for the development of the product and then to the pilot phase and towards a commercial launch.

Bloomberg reported that after being funded by the Online trading giant, Magic Leap is being valued at $4.5bn.The American company has promised to develop a handset equipped with the capacity to utilize a light field technology’s type to stimulate three dimensional images super imposed in reality.

CB Insights data has revealed that since 2013, Hangzhou based company has made an investment in around 5 American start ups. Chairman and founder of Alibaba Jack Ma stated in 2015 Alibaba would help finance tech startups based in US with plans for letting them extend to China.

Co- vice chairman of Alibaba, Joe Tsai will join the board of Magic Leap, which include CEO of Google Sundar Pichai, Rony stated.  

Alibaba Partnered with Nvidia Corp. To Work On Artificial Intelligence

Alibaba's cloud arm Alicloud is collaborating with Nvidia Corporation to boost investment in artificial intelligence and data analysis

Alibaba Group Holding Ltd. is going to be working with the American tech organization, Nvidia Corporation on artificial intelligence and cloud computation, and has planned to enlist around 1000 developers for working on its big-data platform in the upcoming three years. The division of the Chinese e-commerce giant, AliCloud would be making investment in machine learning and data analysis, the company stated on Wednesday.

AliCloud has put $1 billion at stake as it believes that demand for storage and processing from companies and governments would be boosting growth in the upcoming decade as it makes efforts to battle with Amazon.com in the computation industry. Bain & Co has claimed that the investment also reflects Alibaba hunger for processing of information as the online- retail market of China expands to $1.5 billion (10 trillion yuan) by 2020.

The effort made in the field of cloud computation, where services and software are offered to consumers through remote data centers the size of football fields found in the US, prompted Alibaba to establish its second data center in Silicon Valley in last October and develop its first in the European region.

Alicloud is currently expanding its scope beyond basic cloud computation facilities. Chinese Academy of Sciences and the Alibaba’s cloud division jointly established a quantum computation lab to help develop machineries equipped with the capacity to do calculations at a faster pace and safeguard its data centers.

The Chinese online retailer might collaborate with the California based technology company to offer customer support in the fields of high-performance computation and deep-learning, Alicloud stated.

The data compiled by Bloomberg has revealed that Alicloud generates sales revenue by charging fee to clients for utilizing its computation infrastructure. For now, it is contributing to a small part of cumulative revenue, with Internet and computation infrastructure contributing around 3.1% sales in the June quarter.

The business has the potential to contribute over $1 billion to the revenue earned by Alibaba by 2018. SunTrust Robinson Humphrey has revealed that the public cloud is presenting a $120 billion international market opportunity to the online trading giant.

In comparison to that, the revenue of Amazon Web services increased by more than expected 78% to $2.1 billion in the 3^rd quarter. Google and Microsoft Corporation are also battling for renting the computation power and data storage that plays a significant role in building Internet-based technologies.

Register has reported that the measure taken by AliCloud is showing players like Microsoft and AWS that Chinese people are about to enter their markets, and Alibaba has quietly established new data centers to support its newly offered services.