Start-up fund planned in Berlin: Super fintech Ant Financial defies Xi Jinping

Start-up fund planned in Berlin
Super fintech Ant Financial defies Xi Jinping

By Caspar Tobias Schlenk

The Chinese fintech Ant Financial of Alibaba founder Jack Ma is not deterred despite the canceled IPO and conflicts with the government. The company continues to expand – and is preparing a multi-million dollar start-up fund based in Berlin.

His twenty-minute speech on October 24, 2020 could go down as the most expensive in financial market history: For every minute Jack Ma spoke, his online retailer Alibaba lost $ 12.8 billion in value, according to a "Financial Times" journalist calculated a few days ago.

At his appearance, the tech entrepreneur criticized the state banks as not being very innovative. The ensuing dispute with the government meant that Jack Ma's second founding, the fintech Ant Financial, had to cancel its record initial public offering of a targeted 37 billion dollars. According to the Financial Times, President Xi Jinping is said to have made the decision personally. While there was speculation about Ma's whereabouts for months, the billionaire made public for the first time last week. Chinese state media broadcast a video message by the 56-year-old reportedly targeting 100 teachers in rural areas. Ma announced in the video that she wanted to do more for charitable purposes than before.

Unimpressed by Ma's long disappearance, the fintech empire is meanwhile working on a European start-up fund, according to information from "Capital" and "Finance Forward". The preparations for this have been going on for months. Ant Financial wants to invest more in local financial start-ups in the future. The well-connected manager Jasmine Zhang is looking for a management team for the fund in Berlin. According to industry insiders, $ 100 million will come together, Ant Financial will contribute a portion, and other funds will come from other investors, according to industry insiders. The focus is on blockchain technology and fintech business models. The company and Zhang refused to comment.

700 million people use Alipay regularly

For a long time, the company was considered a global tech superstar. Ant Financial developed the extremely successful Chinese payment system Alipay. According to their own information, 700 million people use the app regularly, around half of the Chinese population and 80 million retailers are connected. With Alipay you can not only pay, but also order a taxi or reserve a seat in the cinema. The app can also be used to pay in Europe, for example in the Breuninger department store or at Munich Airport. However, the offer is primarily aimed at Chinese tourists.

Instead of expanding under its own brand, Ant Financial participated in similar business models outside of China. Last March, the large payment group Klarna announced that the Chinese company had joined. Worldfirst from Great Britain is another investment. And Ant is also heavily invested in many Asian fintechs. The Chinese tech group is already on board in almost half of all promising digital wallets in the world, Ant managers proudly reported recently in an interview with a business partner.

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In Europe, fintechs are increasingly emulating the super apps Alipay and Wechat. The start-ups could be attractive investments for Ant Financial and the new fund. The company has also been investing in blockchain projects for a long time. Under the Antchain brand, she is experimenting with specific use cases, such as monitoring supply chains. According to information from "Finance Forward" and "Capital", the new fund should focus more on blockchain ideas. There is a bustling scene in Berlin in particular.

The current conflict with the Chinese government is said to have delayed the fund's schedule. Breaking up the company is currently being discussed. At the moment it looks like the group will have to rearrange itself and will be more regulated in the future, according to the Financial Times report.

This text was first published by Finance Forward.