ANT GROUP

Ant Group didn't start as a fintech company. It started as a workaround.

Back in 2003, Alibaba launched Taobao — its answer to eBay — but had a problem: Chinese consumers didn't trust online payments. There was no PayPal.

Banks were slow and bureaucratic. Buyers were terrified of sending money to strangers over the internet, and sellers had no way to guarantee they'd get paid.

So Alibaba built an escrow service called Alipay in 2004. Simple idea: the buyer sends money to Alipay, Alipay holds it, the seller ships the goods, the buyer confirms receipt, then the money is released.

It solved the trust problem overnight.

Alipay went from a basic escrow service to China's dominant payment platform in about five years. By 2013, it was processing more transactions on Singles Day — China's version of Black Friday — than Visa and Mastercard combined globally.

That's not a typo. Chinese consumers skipped credit cards almost entirely and went straight from cash to mobile payments.

Alipay was the rails the whole thing ran on.

In 2014, Alibaba spun Alipay and related financial products out into a separate entity called Ant Financial — later renamed Ant Group. The logic was that financial services required different regulation, different capital, and frankly different ambitions than e-commerce.

Jack Ma wanted to build a financial superapp that could bank the unbanked across Asia. At its peak valuation of $315 billion in 2020, Ant Group was worth more than Goldman Sachs, JPMorgan's retail banking division, and most of Europe's banking sector.

All of this from a trust mechanism that was duct-taped onto an online marketplace in 2004.

Ant Group makes money in three main ways, and understanding them explains why traditional banks were so terrified of it.

First, payments. Alipay processes billions of transactions a year across China and increasingly Southeast Asia.

Ant takes a tiny cut — often fractions of a percent — on each transaction. When you're doing trillions of dollars in annual volume, fractions of a percent become billions in revenue.

This is the foundation everything else is built on.

Second, credit. Ant built two lending products — Huabei (a virtual credit card) and Jiebei (a small personal loan product) — that together had lent out the equivalent of hundreds of billions of dollars to consumers and small businesses.

Here's the clever part: Ant didn't use its own money. It originated the loans, took a fee for connecting borrowers with actual banks, and moved most of the credit risk off its balance sheet.

This is why regulators eventually had a seizure — Ant was acting like a bank, earning bank-like revenues, but without bank-like capital requirements or oversight.

Third, investment and insurance products. Yu'e Bao, launched in 2013, let users park idle Alipay balances into a money market fund.

It became the world's largest money market fund within a few years, with nearly $270 billion in assets at its peak. Ant earned management fees.

It also sells insurance products — everything from travel insurance to health cover — through the app. The idea is that once you have someone's payment data, you know everything about their financial life, and you can sell them financial products tailored to exactly that.

Alipay is the core. It's a mobile payments app used by over a billion people, primarily in China and across Southeast Asia.

You can pay for groceries, split bills, pay taxes, book travel, and access every other Ant product from inside it. In China, it's less an app and more a piece of infrastructure — like asking someone if they use electricity.

Yu'e Bao is the money market fund embedded inside Alipay. You park your idle balance there and it earns interest.

At its 2018 peak, it was the single largest money market fund on Earth with $270 billion in assets under management. Regulators have since capped individual holdings, which reduced the total, but it's still enormous.

Huabei is essentially a virtual credit card — a buy-now-pay-later product that lets users spend on credit and repay monthly, without ever needing a physical card. Jiebei is the small personal loan product alongside it.

Combined, they turned Ant into one of the largest consumer lenders in China, serving people who had no credit history and no access to traditional banking.

Ant also runs a B2B payments and cross-border settlement business used by merchants, banks, and financial institutions across Asia. The WorldFirst acquisition in 2019 expanded this internationally, giving businesses a way to send and receive payments across currencies — basically Wise but with Ant's scale and infrastructure.

The genius of Ant Group's growth was that it never had to convince anyone to download a new app. Alipay already lived on hundreds of millions of phones because people needed it to shop on Taobao and Tmall.

Once you had the app, Ant quietly added layer after layer of financial products — savings, credit, insurance, investments — inside the same interface. It turned a payment app into a financial superapp through addition, not acquisition.

The Yu'e Bao moment was particularly clever. Chinese savings accounts paid almost nothing — state-controlled banks had little incentive to compete for deposits.

Yu'e Bao offered several times the interest rate of a savings account, with instant access, inside the app people were already using to pay for lunch. Within 18 months of launch it had 185 million users and $90 billion in assets.

Chinese banks panicked and lobbied for restrictions, which tells you everything about how disruptive it was.

International expansion followed a different playbook entirely. Rather than try to replicate the whole superapp in new markets, Ant invested in local payment companies across Southeast Asia, India, and South Asia — Paytm in India, bKash in Bangladesh, GCash in the Philippines, Dana in Indonesia, and others.

The idea was to own the infrastructure layer across emerging Asia without having to fight local cultural and regulatory battles from scratch. By 2020, Ant's investment portfolio touched over a billion people across the region.

On October 24, 2020, Jack Ma gave a speech at the Bund Finance Summit in Shanghai. He called Chinese regulators a 'pawnshop mentality.' He compared state-owned banks to bureaucratic dinosaurs.

He suggested that Ant, not the government, understood the future of finance. Two days later, Chinese regulators summoned Ma for questioning.

Three days after that — on November 3, 2020 — the Shanghai and Hong Kong stock exchanges suspended Ant's IPO. The world's largest ever public offering, which would have raised $37 billion and valued Ant at $315 billion, was dead.

What followed was a systematic regulatory dismantling. The People's Bank of China and the China Banking and Insurance Regulatory Commission ordered Ant to restructure itself as a financial holding company — meaning it would now be subject to the same capital requirements as a bank, which would dramatically reduce its profitability.

Huabei and Jiebei, the lending products, were forced to be separated from the Alipay ecosystem. Ant was fined $985 million in 2023 — the largest regulatory penalty in Chinese financial history at the time.

Jack Ma largely disappeared from public view for months and moved between Hong Kong, Japan, and elsewhere. His shareholding in Ant was restructured to reduce his effective voting control.

This is the challenge that defines Ant Group today. It is no longer the same company that was about to IPO in 2020.

The business still processes trillions in payments, but the financial superapp ambition — bank the planet, own the data, stack the products — has been significantly curtailed. Whether the IPO ever happens in a meaningful form is genuinely unknown.

Ant Group's investor base reads like a who's who of global institutional money, all of whom had a very bad November 2020. Before the IPO was pulled, Ant had raised capital from Temasek, the Singaporean sovereign wealth fund; GIC, another Singaporean sovereign fund; Canada Pension Plan Investment Board; Carlyle Group; Silver Lake Partners; Warburg Pincus; and T.

Rowe Price. Fidelity, BlackRock, and dozens of other institutional investors had already committed to buying shares in the IPO itself.

The most significant backer, at the origin, was Alibaba. When Alipay was spun out, Alibaba retained a 33% stake in Ant.

That stake would have been worth over $100 billion at the peak valuation. The crackdown hammered Alibaba's own share price as collateral damage — Alibaba lost roughly $800 billion in market cap from its 2020 peak to its 2022 trough, partly due to its Ant exposure and partly due to its own regulatory issues.

Post-crackdown, the ownership structure was also quietly restructured. Jack Ma's effective voting control was reduced — he gave up the ability to appoint most of Ant's board directors in early 2023.

The restructuring was widely interpreted as the government's way of ensuring that no single private individual could again threaten the state's grip on China's financial plumbing.