Chinese online insurance player raises $55m in US IPO
Huize Holding, a Shanghai-based insurance platform backed by SAIF Partners, has raised about $55 million in a US IPO.
The company sold 5.3 million American depository shares (ADSs) at $10.50 apiece, the midpoint of the indicative range, according to a filing. The stock opened at $10.65 on February 12 and closed down 4.75% at $10.00.
SAIF, the company’s largest shareholder, held a 19.1% stake following the IPO, the prospectus indicates. Other investors include Focus Technology, which has 17.9% and founder and CEO Cunjun Ma, who owns 14.7%. Shenzhen CDF Capital, which led a RMB200 million ($28 million) Series B round in 2016, holds 7.9%. SAIF featured in the company's Series A.
Founded in 2006, Huize was one of the first internet companies in China to receive approval to sell insurance products online. It acts as a broker, connecting insurance partners with customers and taking no underwriting risk.
According to research consulting firm Oliver Wyman, Huize is the largest independent online long-term life and health insurance services platform in China by gross written premiums (GWP). It facilitated RMB941 million in GWP in 2018, up from RMB617 million the previous year. This rose to RMB1.37 billion in the first nine months of 2019.
Clients access the platform via a website and mobile app, while Tencent Holdings’ WeChat platform plays an important role in customer acquisition. As of last September, Huize had served six million clients since inception with an average age of 32.
The company offers 236 life and health insurance products as well as 993 property and casualty insurance products. It generates revenue through commissions on each policy sold.
Life and health insurance accounted for 90.6% of Huize's RMB735.1 million in operating revenue in the first nine months of 2019. Its net profit for the period was RMB22.5 million. Revenue for the whole of 2018 was RMB508.8 million, up from RMB263.3 million. Over the same period, the company moved from a net loss of RMB97 million to a profit of RMB2.9 million.
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