Alibaba, Tencent-backed online property insurer raises $931m
Zhong An Online Property Insurance, which was set up by Jack Ma and Pony Ma, the founders of Alibaba Group and Tencent Holdings, has raised RMB5.78 billion ($931 million) from a group of investors.
The company issued 240 million shares - or a 19.4% stake in the business - at RMB24 apiece to five investors, according to multiple local media reports. Caixin reported that a Morgan Stanley-controlled vehicle will hold a 2.48% interest in Zhong An, while China International Capital Corp. (CICC) takes 2.52%, and CDH Investments, Keywise Capital Management and SAIF Partners each own less than 5%.
AVCJ understands that the CDH investment does not come from the firm's private equity funds. Rather, the money comes from high net worth individuals participating in a CDH-operated wealth management platform. The platform was originally set up to raise capital for the firm's renminbi-denominated funds.
Ant Financial Services Group, an affiliate of Alibaba, remains the largest shareholder in Zhong An with 16%, while Tencent and Ping An Insurance each own 12%. Mingzhe Ma, chairman of Ping An, is credited with founding the business in 2013 alongside the two Mas. There are now 14 investors in total.
Zhong An is said to be the first insurance company in China to sell policies and handle claims online, although it received RMB791 million in premiums last year - a modest sum compared to other industry participants. The company has ambitions to extend its business into areas such as life insurance and asset management.
Ant Financial, which was built around Alibaba's Alipay payments system, is forging ahead in financial services innovation in China. It is expected to launch an online bank, has an equity crowdfunding platform in development, and earlier this year launched a RMB1 billion fund to back internet and finance start-ups.
Ping An is also seeking to deepen its exposure to disruptive, internet-based financial services. Lujiazui International Financial Asset Exchange (Lufax) - a Chinese peer-to-peer (P2P) lending platform that Ping An wants to become an "exchange of exchanges" for non-standard financial assets - got RMB3 billion in funding in March. CICC and CDH both participated, with the latter investing through its funds.
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