Ant boasts huge profit ahead of dual IPO

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The Daily Pitch: VC

August 26, 2020

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Ant Group shows off scale, profitability in IPO filing

More than 1 billion customers use Ant Group's Alipay to make payments. (VCG/Getty Images)

In its much-anticipated filing to go public in Hong Kong and Shanghai, Chinese fintech giant Ant Group has demonstrated its hold over the Chinese financial services market with its massive scale and profitability.

Ant Group's revenue grew 38% year-over-year in the first half of 2020 to 72.5 billion yuan (about $10.5 billion), according to its filing with the Hong Kong Stock Exchange. The company recorded a 21.9 billion yuan profit in the first half of this year, more than all of last year's profits.

Ant is seeking to bring in $30 billion in the IPO at a $225 billion valuation, according to Bloomberg, a mark that could surpass Saudi Aramco's $29 billion offering last year. The company reportedly plans to sell at least 10% of its shares.

Ant's Alipay service has over 1 billion users and 711 million monthly active users. It logged 118 trillion yuan in transaction volume across mainland China for the 12 months ended in June. Jack Ma controls 50.5% of Ant's voting rights, while Alibaba owns a third of the company, according to the filing.

The company saw a shift in revenue generation in the first half of the year, with digital payments no longer accounting for the largest share. The credit business generated 39.4% of revenue, compared with 35.9% for digital payments during the same period. Huabei, Ant's microlending platform, and Jiebei, its advanced credit offering, are used by more Chinese consumers than any other credit products, Ant said in the filing. The company's investment and insurance segments are also growing quickly; combined they turned out nearly a quarter of Ant's business this year.

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In filing, Palantir CEO takes swipe at Silicon Valley's 'engineering elite'

Palantir co-founder and CEO Alex Karp slammed the tech industry over its distaste for working with the military and painted a bleak picture of technology failing society's public institutions, trumpeting the company's worldview in a letter accompanying its filing for a direct listing.

Karp derided the business models of internet giants that rely on mining and selling user data as the "idiosyncrasies and excesses of the Valley," while defending Palantir as the maker of software that is used to "target terrorists and to keep soldiers safe."

"Government agencies have faltered in fulfilling their mandates and serving the public," Karp wrote. "Our customers come to us because their technological infrastructure has failed them." Karp's remarks echoed Palantir's literal snub of Silicon Valley by recently relocating its headquarters from Palo Alto to Denver.

The company, which is pursuing a direct listing on the New York Stock Exchange, also detailed a special share structure that ensures its founders will retain control "for the foreseeable future." Palantir's largest shareholders are Peter Thiel's Founders Fund, UBS, Sompo Holdings, Disruptive Technology Solutions and 8VC, which was co-founded by Joe Lonsdale. Thiel and Lonsdale are also Palantir co-founders.

Palantir, which was founded in 2003, still hasn't turned an annual profit, its filing shows. Revenue totaled $742.6 million last year, up about 25% from the previous year.

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Heavy hitters lead the way in our Q2 league tables

The Carlyle Group, KKR and TPG Capital are three of the biggest names on the private equity landscape. In the second quarter of 2020, all three were among the 10 most active PE firms in the US, led by Carlyle and its 13 new investments.

What other firms are at the top of the list? And which other investors, advisers, bankers and lawyers have stayed the busiest? PitchBook's Q2 2020 Interactive Global League Tables break down the data across dozens of different criteria, now in a handy sortable format that makes it easier than ever to assess the market's biggest players:

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Quick Takes


	The Daily Benchmark
	2016 Vintage Global PE Funds
	VC Deals
	Lyra Health hits unicorn valuation with $110M round
	Bill Gates leads $85M investment in Kymeta
	Split secures $33M
	Prescryptive Health picks up $26M
	Exits & IPOs
	Aveva announces $5B deal with OSIsoft
	WorldRemit to buy VC-backed Sendwave
	Fundraising
	Scribble Ventures eyes $35M for debut vehicle

The Daily Benchmark

2016 Vintage Global PE Funds

Median IRR

14.56%

Top Quartile IRR Hurdle Rate

23.11%

1.22x

Median TVPI

Select top performers

Gemspring Capital Fund I

Francisco Agility Fund

Renovus Capital Partners II

*IRR: net of fees

128 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

Lyra Health hits unicorn valuation with $110M round

Lyra Health, a California-based provider of mental healthcare benefits for employers, has raised $110 million, with Forbes reporting that the new funding values the company at $1.1 billion. The Series D was led by Addition, with participation from Adams Street Partners, former Starbucks CEO Howard Schultz, Casdin Capital, Glynn Capital and others. Lyra was valued at $557 million with a $75 million round in February, according to PitchBook data.

Additional Investors:

IVP, Greylock Partners, Meritech Capital Partners, Providence Ventures, Tenaya Capital

View round

View 10 competitors »

Bill Gates leads $85M investment in Kymeta

Communications startup Kymeta has raised $85 million in a round led by Bill Gates. The Redmond, Wash.-based company provides satellite and cellular services for customers globally. Members of Kymeta's leadership team, including executive chairman Doug Hutcheson, invested $1 million as part of the financing. Kymeta was valued at around $424 million in 2017, according to PitchBook data.

View details

View 9 competitors »

Split secures $33M

Comcast Ventures has led a $33 million Series C for Split, the developer of a platform that helps product engineers develop new features. The company's customers include Twilio, Salesforce and National Geographic. Split was valued at $65 million in 2018, according to PitchBook data.

Additional Investors:

Lightspeed, Accel, Harmony Partners, 01 Advisors, M12, Atlassian, ServiceNow

View round

View 21 competitors »

Prescryptive Health picks up $26M

Prescryptive Health has raised a $26 million Series A led by Morningside Ventures, with participation from SeaChange Fund and Pallasite Ventures. Founded in 2017, the company offers a platform that provides data on prescription drug coverage and costs.

View round

View similar company »

Exits & IPOs

Aveva announces $5B deal with OSIsoft

Industrial software specialist Aveva has agreed to purchase OSIsoft in a deal that gives the developer of data analysis software for industrial markets an enterprise value of $5 billion. Earlier this month, Aveva had confirmed reports that the two sides were negotiating a deal. SoftBank reportedly holds a 45% stake in California-based OSIsoft after first backing the business in 2017.

View details

View 73 competitors »

WorldRemit to buy VC-backed Sendwave

British cross-border payments specialist WorldRemit has agreed to buy Sendwave, a remittance startup operating in Africa and Bangladesh. The cash-and-stock deal is worth over $500 million and will value the combined company at around $1.5 billion, according to Bloomberg. Sendwave has raised more than $13 million in VC funding and was valued at $111 million in 2016, according to PitchBook data.

View details

View 1 competitors »

Fundraising

Scribble Ventures eyes $35M for debut vehicle

Scribble Ventures has established a target of $35 million for its debut flagship fund, according to an SEC filing. The early-stage firm targets investments ranging from pre-seed to Series A. Based in California, Scribble Ventures was founded by Elizabeth Weil, former managing director at 137 Ventures. The firm has backed startups including BuildBuddy, the provider of a software testing platform, and Warmly, a generator of sales leads.

View fund

View 2 investments »

Chart of the Day

"Late-stage capital infusions have led to maturation across Europe in recent years, including the France & Benelux ecosystem. Late-stage capital constituted a decade low of 34.8% of the region's overall deal value in 2017 but has risen sharply since, reaching 57.5% in 2019 and pacing higher in 2020 so far."

Source: PitchBook's 2020 France & Benelux Private Capital Report

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Ant boasts huge profit ahead of dual IPO

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