Ant Group, the financial technology arm of Alibaba Group, has filed for a dual listing in Hong Kong and Shanghai, in what may be the largest share offering. The fintech unicorn will sell at least 10% of its total capital post-issuance, split between Hong Kong and Shanghai’s STAR Market. China’s richest man, Jack Ma, will donate 611,337,334 shares of Ant Group to charitable causes, the filings showed. While the size of the IPO is still subject to market conditions, the dual listing is widely expected to surpass Saudi Aramco’s USD29.4 billion listing last December, the record for the world’s largest fundraising. Ant Group operates Alipay, one of China’s two dominant online payments services. Over a billion users use Alipay for purchases both online and in stores, to send money to friends, and to pay bills. In the 12 months to end-June, Ant recorded CNY118 trillion in transaction volume.

First-half revenue rose 38% to CNY72.5 billion, from CNY52.5 billion a year earlier, giving the company CNY24.4 billion in pre-tax profit, an eightfold jump year-on-year. More than half its 2019 revenue came from financial services such as lending, wealth management and insurance offered through Alipay. The platform also enabled US$290 billion in credit to individuals and small businesses, as well as USD500 billion in investments. In the filing, Ant said it plans to use the funds from the listing to expand its services, invest in research and development, and to expand its payments business internationally. Ant Group was valued at USD150 billion in a private fundraising round in 2018, making it the most valuable startup in the world. The company also runs one of the world’s largest money market funds, as well as Zhima Credit, a private credit rating system for its users. Alibaba listed in the U.S. in 2014, but last year raised billions more in a second listing in Hong Kong. In July, Alibaba’s Chinese rival JD.com raised almost USD4 billion in an IPO in Hong Kong that was the world’s second-biggest of the year. Tech analysts say Ant Group controls more than half of China’s huge mobile-payments sector, which it fiercely contests with Chinese rival Tencent’s WeChat, the Shanghai Daily reports.

Ant Group plans to allocate 40% of the CNY48 billion it plans to raise from its initial public offering in the STAR Market on innovation and technology-related investments, as they “hold the key to success and serve as the foundation for an inclusive ecosystem”, the China Daily adds. Ant said it has 26 indigenous core technology products, 18 international and national awards for key technologies, and some 26,000 patents or patent applications across 40 countries and regions, spanning multiple technologies from artificial intelligence, risk control, and security to blockchain and robot advisory services. Ant charges technology service fees rather than earn income from interest rate spreads, according to You Xi, Researcher at the Beijing Kandong Research Institute, a technology-focused think tank. “Data can pinpoint and predict customer needs, offer customized solutions, and hence gather more clients,” You said. “The growing customer base will in turn generate more data it can leverage to perfect its services.” Three out of the company’s nine board members are from technology-related backgrounds, including CEO Hu Xiaoming. Over 60% of Ant employees are in technology-related posts, whereas research and development expenditure accounted for somewhere between 7.3% and 8.8% of group revenue during the last three years.

Ant’s IPO would be the first simultaneous listing in Hong Kong and the year-old STAR Market, boosting Hong Kong’s status as an international IPO market and helping enhance STAR as a capital markets center. Ant, already the world’s most valuable unicorn, did not disclose the size, timetable or other key details of the offering in its preliminary prospectus. The dual listing could take place in October. Companies raised USD10.3 billion via IPOs on the STAR Market in the first seven months of the year, making the bourse the second-biggest market globally for such listings, behind Nasdaq, but ahead of Shanghai’s main board and Hong Kong.

Ant is also involved in shaping China’s digital currency architecture, according to the filings, which stated it is “one of a number of powerful commercial institutions” that the People’s Bank of China (PBOC) summoned in late 2017 to develop the digital currency system. “Over the past two years, the company has been actively involved in the development and testing of digital yuan, and has been conducting closed-door pilots in cities like Shenzhen, Suzhou, Xiong’an and Chengdu to prep for the forthcoming Winter Olympics scenarios,” it said, as reported by the China Daily.