JD Finance and Ant Financial go head-to-head
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JD Finance and Ant Financial go head-to-head

JD Finance, the fintech arm of China’s number two online retailer JD.com, is “close to” picking up $1.9 billion in investment from a group of Chinese financial services giants. According to Bloomberg, this could provide it with “a clutch of influential backers” as its battle with Ant Financial, an Alibaba affiliate, continues to heat up.

Alibaba’s share price has risen by 10% so far this year

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Source: Yahoo Finance

Just over a month ago, Ant Financial raised about $14 billion in a funding round designed to accelerate the expansion of Alipay and innovate some new fintech solutions. This has turned Ant into the world’s largest fintech firm and sets it firmly on an upward trajectory. Even before the funding round, Ant was China’s biggest online payments service and had control of the world’s largest money market fund. Next on its list? Everything from consumer lending to credit scoring.

John Ho, the founder of Hong Kong-based investors Janchor Partners (which took part in Ant’s funding round) explained the situation thusly:

“China is entering the next phase of its development which will require a more efficient financial services ecosystem. With its technology, Ant is in a position to enable ordinary consumers to find and access financial services they weren’t able to before.”

JD.com might only be China’s second-biggest online retailer (no prizes for guessing who’s in number one spot) but it’s still an internet giant in its own right. Recent investors into JD Finance include CICC Capital, a Bank of China investment arm, and influential buyout firm CITIC Capital. The question is whether this in-flow of cash, and the powerful backers it’s coming from, will give it enough clout to mount an offensive against the much bigger Ant.

In any case, with 700 financial institutions on its books, and serving 8 million small businesses and 400 million individuals, JD is certainly becoming too big to ignore.

Disclosure
Dominion holds JD.com and Alibaba in its Global Trends Ecommerce Fund.


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