Jack Ma's Ant Looks To Shed US Biometric Security Unit EverVerify: FT

Alibaba Group Holding Ltd (NYSE: BABA) subsidiary Ant Group is planning to sell a key biometric security company it owns in the United States, the Financial Times reported Tuesday.

What Happened: The Chinese fintech is looking to sell the Kansas City, Missouri-based EyeVerify in the first half of this year, according to a person familiar with the matter.

Discussions were held with a number of potential acquirers, FT’s sources revealed.

EyeVerify’s technology — which allows users to scan their face as a password — is used by major banks such as Wells Fargo & Co (NYSE: WFC). 

EyeVerify was seen to pose data security concerns by some in the previous Donald Trump administration, according to Roger Robinson, CEO of RWR Advisory Group, a research and risk consultancy.

“Moving to protect the personal data of Americans will probably continue under President [Joe] Biden for both political and security reasons,” said Robinson.

Why It Matters: Ant purchased EyeVerify for $100 million in 2016. The deal was cleared by the Committee on Foreign Investment in the U.S., as per FT.

The sale takes place amid heightened U.S.-China tensions and growing scrutiny of user data in the United States.

The Jack Ma-founded fintech also faces potential fines and restructuring costs and is looking to raise capital.

In November, Ant’s mega-IPO was scuttled by Beijing after Ma and other Ant executives were summoned by Chinese regulators for a reprimand.

See Also: China President Xi Jinping Personally Ordered Halt Of Jack Ma's Ant IPO: WSJ

China’s central bank Governor Yi Gang said Tuesday that the IPO can resume once issues surrounding Ant’s alleged monopoly and consumer privacy are solved.

Price Action: Alibaba shares closed nearly 1.7% higher at $265.92 on Tuesday and gained 0.54% in the after-hours session.