What happened: Alibaba and Ant Financial, its fintech affiliate, have agreed to ramp up their stake in pharmaceutical company Alibaba Health. Alibaba’s medical products subsidiary Ali JK will buy a total of 242.4 million shares while Ant Financial subsidiary Antfin will subscribe for 60.6 million shares, according to the document disclosed on Thursday. The Hong Kong-listed Alibaba Health will gain around HKD 2.3 billion (around $289.5 million) in cash from the new subscription agreement. The company said it intends to use the new funds to repay loans, finance ongoing business operations and expansion, and complete previously committed investments.
Why it’s important: Alibaba Health, which became a subsidiary of Alibaba in 2015, reported RMB 5 billion ($723 million) in revenue, a 109% increase, for the year ended March 31, 2019. The rapid growth in revenue is mainly driven by its self-operated healthcare products business, pharmaceutical e-commerce platform, and its consumer healthcare business. The move, which will deepen the cooperation between Alibaba’s health and its fintech arm, is the e-commerce giant’s latest push in China’s healthcare sector.Ant Financial’s online mutual aid platform Xiang Hu Bao has grown in popularity over the past year and is quickly expanding its healthcare offerings. Earlier this week the platform announced that it had approximately 65 million users since its launch in October.