Venture Capital: Chinese Insurtech Waterdrop Lands $230M in Pre-IPO Funding
Waterdrop is a Chinese online seller of insurance, an illness “mutual aid” crowdfunding platform, and a mutual fund operator.
Waterdrop Inc raised $ 230 million in funding led by Swiss Re (SWX: SREN) and Chinese Internet giant Tencent Holdings (HKG: 0700). Existing investors including IDG Capital and Wisdom Choice Global Fund also participated. (Reuters)
According to a Reuters source, Swiss Re committed $ 100 million to the funding round. The fundraising was conducted at a valuation of nearly $ 2 billion.
Waterdrop, an insurtech and crowdfunder
Headquartered in Beijing, Waterdrop sells insurance policies online through its Waterdrop Insurance Mall. It facilitates business crowdfunding via its Waterdrop Crowdfunding platform. It also operates mutual funds.
Users in the medical mutual aid business contribute very small amounts (a water drop) for funding a mutual medical benefits scheme. In case of a medical emergency, the firm pays out as much as $43,000.
Waterdrop was founded in 2016 by Shen Peng. He was a former executive at Chinese food delivery and local services giant Meituan Dianping.
On its website, Waterdrop also says it is a strategic investment by Tencent Holdings.
Its insurance business boasts of 120 million unique policyholders. They paid a premium of $ 865 million in the first half of 2020.
Use of funds
“Our long-term goal is to become a leading online healthcare platform in China with an ecosystem that includes insurers, pharmaceutical companies, hospitals, and drug stores, as well as nursing institutions and rehabilitation institutions,” says Peng Shen, in a statement, according to TechCrunch. “We are committed to not only helping users with financing issues but also providing them with integrated healthcare services along the way.”
Waterdrop will use the new money to develop artificial intelligence systems and big data applications for all its products and services. It also intends to expand and accelerate its current medical and healthcare businesses.
“As a leading online InsurTech company, Waterdrop is well-positioned to tackle the pain points of traditional insurance and pave the way for future breakthroughs in the industry, such as the accelerated technological innovation and digitalization of the industry worldwide that we have witnessed during the COVID-19 situation,” said Ning Zhou, Head of principal investment and acquisition for Asia, Swiss Re to Reinsurance News.
Waterdrop also plans on a US IPO. It has hired Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS) for managing the issue.
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