Chinese Crowdfunding, Insurance Site Waterdrop Raises $230 Million, Plans U.S. IPO

Chinese online insurance technology platform Waterdrop Inc. has raised $230 million in a new funding round led by reinsurer Swiss Re and Chinese internet giant Tencent Holdings, it said on Thursday.

Waterdrop’s existing investors, including IDG Capital and Wisdom Choice Global Fund, also participated, it said in a statement.

Two sources with knowledge of the fundraising told Reuters that Waterdrop was valued at nearly $2 billion in the funding round. One of them said that Swiss Re itself had invested $100 million.

About Waterdrop

Waterdrop, also know as Shudi, describes itself on its website. Here are edited excerpts:

Waterdrop is the first platform for China’s Internet health insurance protection. Waterdrop Insurance Mall and Waterdrop Mutual Assistance form the business section of Waterdrop Company. Waterdrop Chip and Waterdrop Public Welfare form the social responsibility section of Waterdrop Company. They form a complete insurance protection system of “pre-protection + post-assistance,” using Internet technology to help promote insurance and medical care for the masses, and realize the mission of “protecting hundreds of millions of families.”

Water Drop Insurance Mall, formerly known as Water Drop Insurance, is a national insurance broker company.

Didiqian is the pioneer of domestic Internet personal illness fundraising with zero service fees. It has provided free fundraising services to hundreds of thousands of severely ill patients with financial difficulties.

Waterdrop Mutual Assistance is a network mutual assistance community. All members join the community to help each other to resist risks such as cancer and accidents. If members are unfortunately ill or encounter an accident, they can follow the rule of “one person is sick, everyone shares” and can get a health mutual aid fund of up to 300,000 yuan.

Swiss Re declined to comment on its investment size, but said the company’s participation in the round was part of its long-term commitment to China.

The fundraising comes ahead of Waterdrop’s initial public offering plan in the United States, according to two separate people.

The company has hired Bank of America and Goldman Sachs for the float, which could happen as early as this year, the people said. They added that preparations were still in the initial stages.

Waterdrop and the two banks declined to comment. The sources could not be named due to confidentiality constraints.

Founded in 2016, Beijing-headquartered Waterdrop distributes insurance policies online via Waterdrop Insurance Mall, provides illness insurance crowd-funding via its platform Waterdrop Crowdfunding, and operates mutual funds.

The insurance business, with 120 million unique policy holders, reported a total written premium of $865 million in the first half of this year, the company said in its statement. It expects to double its total written premium in 2020.

With the new capital, Waterdrop said it will tap into artificial intelligence and big data for its products and services, and accelerate its initiatives in medical and healthcare services.

Waterdrop, founded by Shen Peng, a former executive at Chinese food delivery and local services giant Meituan Dianping, also counts his ex-employer as an investor.

(Reporting by Kane Wu and Scott Murdoch; Additional reporting by Sumeet Chatterjee; Editing by Jan Harvey)