The Internet finance branch of Alibaba Group Holding Ltd., Ant Financial Services Group, announced that it has begun the second round of financing ahead of scheduled initial public offering (IPO).
While the company did not specify the target amount, Ant Financial confirmed that it has started raising capital for the second time in six months, according to China Daily.
Publicity officials from the company said, "We don't have a timetable for the IPO yet. But we are paying close attention to the market trends and policy changes."
According to Bloomberg, Ant Financial Services Group is set to raise a minimum of 10 billion yuan ($1.5 billion) in its latest round of financing.
After spinning off from Alibaba in 2011, Ant Financial operates China's largest online payment service provider, Alipay, with approximately 270 million active monthly subscribers. The company, besides one of China's first Internet banks, MYbank, runs Yuebao, the largest money market fund in China.
The Shanghai-headquartered corporation finished its first round of fundraising in June 2015, which valued the Internet finance firm at approximately $45 billion. In this first round, Ant Financial delivered eight investors, including major Chinese firms like the National Council for Social Security Fund, China Development Bank's CDB Capital, and Postal Savings Bank of China.
The announcement of a second round of financing comes days after reports that its rival JD Finance wanted to commence its initial round of fundraising with a target between 5 and 6 billion yuan.
It was also rumored that JD Finance is planning to go public in China's A-share market with an objective to list in 2017. Its public relations office pointed out that it does not respond to market rumors.
Amid the increasing fundraising climate in China for tech corporations, analysts project the unlikelihood of the two Internet finance companies running short of cash.
Li Chao, an analyst with iResearch Consulting Group, said: "Being under the umbrellas of China's no. 1 and no. 2 e-commerce players, neither Ant Financial nor JD Finance needs to raise funds. I guess they want to raise their valuations via fundraising. More importantly, it will help in boosting credibility and in getting endorsements from government-backed investors."
Chao added that Internet-enabled finance firms are not conventional finance organizations. They are still new and risk some regulation constraints. Therefore, such companies seek government support by having government-backed investors.