Alibaba (BABA) Raises Funds To Boost Worldwide Presence

 | Jun 07, 2018 10:25PM ET

In a bid to boost its presence in the global payment sector, Ant Financial, an affiliate of Alibaba Group Holding Limited (NYSE:BABA) recently raised $14 billion in Series C funding.

Many leading investors participated in this round. This shows that Ant Financial that operates China’s most popular payment platform, Alipay, has the potential to offer significant high returns on their investments.

Some of the investors that participated in the funding include Warburg Pincus, GIC, Temasek, Canada Pension Plan Investment Board, Silver Lake, General Atlantic and Carlyle Group (NASDAQ:CG) to name a few.

The investment will help the company to focus on the advancement of Alipay and its other financial services. This is expected to drive the adoption rate of these services and apps, thus driving its top line.

Expanding Globally

Alibaba’s fund raising strategy bodes well for its global expansion plans. At present, the company has 870 million customers in the global payment market.

Per Bloomberg, the company will get support from Temasek’s participation, which will help it to extend Alipay’s reach outside China.

Ant Financial has already made investments in Thailand, Korea, Indonesia, Hong Kong, Malaysia, the Philippines, Pakistan, Bangladesh and India.

Recently, the company announced the acquisition of 20% stake in bKash, a Bangladesh-based mobile financial services provider, which bodes well for its international expansion. Additionally, its tie-up with Pakistan-based Telenor Group to acquire 45% stake in Telenor Microfinance Bank led to the expansion of Alipay in Pakistan. Also, the company has teamed up with Paytm, the online payment company of India.

Further, Alibaba extended its partnership with First Data for the deployment of Alipay at the latter’s point-of-sale across North America.

Coming to price performance, shares of Alibaba have returned 46% in a year, marginally underperforming the Alibaba Group Holding Limited Quote

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Written By: Zacks Investment Research

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