IDG Capital invests in CreditEase's insurance unit
CreditEase Insurance Agency, an insurance unit of China’s CreditEase Wealth Management, has raised RMB80 million ($12 million) from investors including IDG Capital through a private placement on the National Equities Exchange and Quotations (NEEQ).
According to a filing, CreditEase Insurance issued 3.5 million shares at RMB27.7 apiece. IDG has invested RMB15 million in the firm through two entities, while CreditEase New Financial Industry Investment Fund committed RMB65 million for 2.3 million shares. The round valued CreditEase Insurance at RMB1.47 billion.
CreditEase Insurance was established in 2011 after gaining approval from the China Insurance Regulatory Commission. Through its online platform, the company offers more than 2,000 insurance plans from 50 providers, including China Life, PICC Life Insurance, New China Life and Taikang Insurance. Last year, it launched a Smart Insurance, which delivers customized insurance solutions to customers based on big data technology. The company also operates 18 physical branches in different Chinese cities.
CreditEase Insurance listed on the NEEQ, also known as New Third Board, in December last year. Revenue came to RMB200 million in 2016, up from RMB92 million in 2015, while net profit increased 15.75% year-on-year to RMB22 million in 2016.
The new capital will be used to develop Xiaozhi Technology, a new business line that focuses on using new technology to sell life insurance products, according to a statement.
CreditEase started as a peer-to-peer (P2P) microcredit lender in China. It has diversified into different financial segments and now provides a range of consultation services, including wealth management, credit rating and microcredit lending. The firm previously received funding from IDG, Morgan Stanley Private Equity Asia and KPCB.
The wealth management business operates under CreditEase Wealth Management. It provides global asset allocation services for Chinese high net worth individuals, with products covering fixed income, private equity, capital markets, hedge funds, real estate, insurance, as well as investment immigration and international education.
The CreditEase New Financial Industry Investment Fund, which was launched by CreditEase Wealth Management in 2016, has RMB6 billion in capital in renminbi and US dollars. It invests in financial technology companies in China and overseas.
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