Through its affiliate, Ant Financial, Alibaba Group Holding Ltd (NYSE:BABA) is gearing up for global expansion. The company is putting together a strategic partnership with Kakao Pay, a mobile finance subsidiary of the South Korean messaging platform. Ant, which is a Chinese financial services powerhouse, will inject a $200 million worth of investment into this partnership.
Ant Financial is already managing Alibaba’s digital banking business and it is now heading to launch Kakao fintech division. The move is timely given that Kakao, which is worth $5 billion, is Korea’s dominant messaging service. Ant’s services are expected to give a new look to online payments, which will now go offline.
Investment aligns with Ant’s strategic push to create a global network of financial assets
Kakao’s currently registration of users is close to 14 million while Alipay, which is operated by Ant has more than 450 million global users. On the other hand, around 99% of Smartphones in South Korea have been installed with Kakao Talk.
Clearly, there is a need for the two to work together to enhance each other’s growth. President of Ant Financial International, Douglas Feagin confirms, “South Korea is an important market for Ant Financial in its global expansion, and we see many opportunities in the market for innovative services and growth in mobile payments.”
Ant Financial has acquired substantial deals over time
Ant has a stake in the Paytm; an Indian mobile payments platform. Its stake is at 40% having invested more than $500 million in 2015. A month ago, it acquired a deal worth of $880 million for MoneyGram International, the US-based money transfer service.
The company is now on the verge of closing a $3 billion debt funding deal. The funds will play a significant role in investments and further acquisitions. Besides, the new collaboration is expected to open more markets for Alibaba’s e-commerce services. It will also make it easier for anyone wanting to use Alipay while visiting China.
Meanwhile, Alibaba’s stock closed at $102.12 witnessing an increase of $1.60 or 1.59%.
