What you need to know about unicorn Ant Financial, potentially the largest IPO in history

avoid Chinese finance regulators, filed papers on Tuesday to go public in a dual listing in Shanghai and Hong Kong.” data-reactid=”17″ type=”text”>Ant Financial, which rebranded itself to Ant Group in June in an apparent effort to avoid Chinese finance regulators, filed papers on Tuesday to go public in a dual listing in Shanghai and Hong Kong.

The offering could eclipse the $29 billion raised by Saudi Aramco’s initial public offering, which listed last December on the country’s local market. If Ant’s numbers hold, it would become the newest largest IPO in history. That’s fitting of the world’s most valuable private tech unicorn, last valued at $150 billion in 2018 after a record $14 billon funding round. Now, it is targeting a public valuation of $225 billion.

So, what exactly does Ant do, and why is it so valuable?

HANGZHOU, CHINA – JULY 21, 2020 – Ant Financial logo photographed at the hangzhou headquarters of Ant Group, the parent company of Alipay. Hangzhou, Zhejiang Province, China, July 21, 2020. – PHOTOGRAPH BY Costfoto / Barcroft Studios / Future Publishing (Photo credit should read Costfoto/Barcroft Media via Getty Images)

Right before Alibaba’s $25 billion IPO in 2014 (the world’s largest until Saudi Aramco), Alibaba CEO Jack Ma spun out its payments division under the name Zhejiang Ant Small & Micro Financial Services Group, later just Ant Financial Services Group. The obvious aim was to bring Ant public on its own. Four years later, Alibaba took a 33% stake in Ant.

The company’s core product is Alipay, the most popular digital payments app in China that boasts a more than 50% share of China’s massive mobile payments market. Experts don’t see the mobile payment revolution withering any time soon, and Alipay is the global king in mobile payments. It also sells tech services to other Chinese financial and e-commerce businesses.

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Alipay launched in 2004 and hit 1.2 billion users last year. Almost all of its growth has come in Asia, though Alipay has signed a slew of U.S. partnerships with chains like Walgreens (WBA) and Neiman Marcus to let Alipay customers from China pay with Alipay when shopping in America.

Last year, Ant opened up its app to American tourists in China — before the COVID-19 pandemic put a prolonged halt to global tourism.

Alipay users conduct more than 100 million mobile transactions on Alipay every day. The app’s biggest competitor in China is WeChat Pay, from Alibaba rival Tencent. 

And then there’s Yu’ebao, which is China’s largest money-market fund, with $170 billion in assets. Ant Group owns that, too.

Ant’s public offering will stand apart from the new unicorn IPO parade about to happen in America: Airbnb, DoorDash, Snowflake, and Palantir (via directing listing) are all aiming to go public by the end of this year — but none are profitable yet.

Ant Group, in contrast, is wildly profitable. In its IPO filing, it reveals $3.2 billion of profit in the first half of 2020 ($10.5 billion in revenue), reflecting year-over-year growth of 1,000%. And that eye-popping profit came during a global virus outbreak.

Daniel Roberts is an editor-at-large at Yahoo Finance and closely covers tech. Follow him on Twitter at @readDanwrite.

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