Investment firm Warburg Pincus lowered Ant Group’s valuation by 15% to below $ 200 billion due to risks associated with the company’s restructuring. In addition, there are currently no signs that Ant Group’s failed IPO will be resumed anytime soon.
Warburg Pincus was a major investor in the Ant Group’s private fundraising phase, which began in 2018. At the end of June, the fintech company was valued by Warburg at $ 224 billion, but at the end of September its valuation was lowered to $ 191 billion. Several other global investors have also previously lowered their valuation of the company, demonstrating growing skepticism as the company undertook a restructuring under pressure from regulators. Ant Group was planning an IPO last year with an estimated value of $ 315 billion, hoping to raise up to $ 37 billion.
The IPO procedure was canceled by regulators two days before the dual listings in Hong Kong and Shanghai, leaving investors wondering about the company’s return. Following the cancellation of its IPO, the company, controlled by Alibaba founder Jack Ma, embarked on a restructuring plan that turned Ant Group into a financial holding company. The once-thriving consumer lending business has been downsized, and it has had to restructure itself to accommodate new payments and insurance regulations.
At the end of the first half of 2021, Ant Group’s revenue was about $ 16.9 billion, which is 52% more than in the same period last year, and the adjusted net profit was $ 4.9 billion, and this is an increase of 29%. Despite this, many investors adjusted the company’s valuation in a negative direction. According to Fidelity, from January to July, the company fell from $ 233 billion to $ 68 billion. And Bernstein analysts lowered Ant’s estimate to $ 120 billion in June. Now investors have almost no hope for the resumption of the IPO in the near future, since the restructuring process has not yet been completed, and in a number of areas, regulatory approval is still required.