Chinese insurtech Waterdrop raises over US$430m in August
The first, held at the beginning of the month, achieved $200m for the purpose of expanding its healthcare crowdfunding capabilities. It was also at the time that Waterdrop is worth approximately $2bn and that it has been considering an IPO, although this has been subsequently .
This would have been an impressive development for a company founded only four years prior (although not totally unheard of in the insurtech space - see ). Waterdrop’s success was then bolstered on 21 August when it was reported that it had secured a further $230m in a Series D funding round.
Becoming a leading provider
“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.
Ning Zhou, Head of Principal Investment and Acquisition for Asia, Swiss Re, commented that Waterdrop’s influential and innovative presence in the market stood it in good stead to spearhead the changes that needed to be made in the insurance industry.
“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 digitalisation of the industry worldwide that we have witnessed during the COVID-19 situation.”
Insurtech continues to develop in Asia
This is reflective of an in the APAC market that InsurTech Digital recently explored, wherein it was found that insurance companies favouring a digital approach were maintaining a strong position in the market.
Having an investor like Tencent will likely enhance this element of Waterdrop’s development; Yu Haiyang, MD of Tencent Investment, said in a statement:
“Amid the rapid expansion of the Chinese commercial health insurance market, Waterdrop has seized the market opportunity very well and used the power of technological innovation to help tens of millions of families.
“Tencent continues to be a long-term supporter of Waterdrop and will help it build an even better user experience.”
Global investment in insurtech reaches all-time high
Global investment in the InsurTech sector reached an emphatic record during H1, 2021, as half-year funding of US$7.4 billion exceeded full-year investment in 2020, and in every other year, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.
It was found that the latest quarter saw 162 deals yield more than $4,824 million in investment, a 210% increase over Q2, 2020. The enormous quarterly total, itself more than any annual total before 2019, was driven largely by 15 mega-rounds of $100 million or more. Collectively, these deals reached $3.3 billion, or two-thirds of total funding during the quarter. The money was raised predominantly by later-stage players seeking expansion.
A need for the insurance community to reflect digital changes
Series B and C fundraisings drove a large number of deals in the second quarter, but the number of early-stage deals also increased. They were up by more than 9% from the previous quarter, and 200% from pandemic-stricken Q2, 2020. As a percentage of overall deals, early-stage activity held roughly steady, at 57%.
InsurTechs focused on distribution accounted for 55% of start-up deals, and for 10 of the 15 mega-rounds. Most of the distribution InsurTechs target reduced dependence on agent channels. Of all Q2 deals, 73% were for P&C-related InsurTechs, while 43 companies raised funds for L&H technology. Funds were raised by companies from 35 countries, including new entrants Botswana, Mali, Romania, Saudi Arabia, and Turkey.
Dr. Andrew Johnston, global head of InsurTech at Willis Re, said: “As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviours. Consumers and businesses increasingly expect insurance to be delivered when and how they want it, and risk carriers that fail to respond will fall away over time. To embrace technology is a minimum survival condition. Those that use it to redefine service in the insurance world will thrive. That means a positive future for InsurTechs that bring a truly differentiated business approach to our industry. Some of them will create untold long-term opportunities for themselves and the insurance sector.”