Primer Podcast #32 - Ant Group IPO Halt, Industries Affected By Election, and EdTech

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In this episode, we dive into Ant Group, the highest valued fintech company in the world. Ant Group dates back to 2004 when Alipay was created at the beginning of E-commerce to solve the trust between buyers and sellers in online transactions. Sort of like an Escrow service where it would hold the cash to ensure that products or services were delivered. This allowed e-commerce to flourish, it solved one of the largest problems. The company was previously held under the Alibaba Umbrella owned and Co-Founded by Jack Ma and was spun off in 2011 from Alibaba. Alibaba does have a 33% equity stake in the business.

Ant Group divides its services into three main categories. CreditTech , InvestmentTech, and InsureTech

It was supposed to be the biggest IPO of a company, Ant Group - To the point where Hong Kong stockbrokers were so confident in Ant Group’s blockbuster IPO that they offered retail investors to buy the stock with as much as 20x leverage some reports saying even 30x leverage. Due to a reflection of fierce competition for finance and trading fees. Ant planned to do a dual listing in Hong Kong and Shanghai and was expected to raise at least $35B. Hong Kong has more than 700 brokerages but only 14 generate more than half the city's daily stock turnover. Loans increase the odds of winning an IPO allocation and amplify gains when the stock rises after listing. Using the 20x leverage, if the stock declined 5% then their entire investment would be wiped out. 

Regulators told the company that the online lending business world faces greater scrutiny. Most brokerages said they would waive handling fees and interest rates on margin loans for investors who had subscribed to the share. Bright Smart, a brokerage said that listed companies should be required to compensate investors in such situations, other major lenders like HSBC and BOC Hong Kong Holdings said they would still charge interest on margin loans. 

Check out the acquired episode on Alibaba Here:

https://www.acquired.fm/episodes/season-3-episode-5nbspalibaba

We also talked about Edtech, This industry is growing in the united states, it is called Edtech. It is comprised of PreK-12, post-secondary, and corporate training. Research made by Grandview estimated the global education tech market to be around 76.4 billion dollars in 2019, and they expect a CAGR of 18.1% from 2020 to 2027.  The K-12 sector is being the most explored, with 42% of total revenue from the industry Preschool expected to have the highest CAGR 2020-2027 (20%) North America is the region that is focusing the most on EdTech, 38.2% of 2019 rev. American Edtech companies raised around 1.5 billion in 2018. This number increased to 1.7 in 2019 (deals dominated largely by series C)

Emerging Technologies are creating a new environment for companies. We can divide those supporting technologies into 4 different industries (Virtual Reality and Augmented Reality, Artificial Intelligence, Robotics, and Blockchain) AR/ VR: Labster, which brings virtual laboratory simulations for STEM students (a great solution if properly executed), raised $21 million for its series B. Owl Ventures led the round.   AI: Kidaptive, an adaptive-learning company that uses their platform combined with 3rd parties’ solutions (such as iPad-games) to capture and share data collected on the students to help educate companies to increase their learning outcomes. Raised $19.1 million in series C in 2018.  Robotics: Roybi and Robotify Blockchain: Credly, which I would say is a section of itself, structuring a skills-based currency for workers where badges are given to you based on your skills and shared with companies.