Fund focus: Eurazeo has SE Asia insurance tech covered

In a somewhat unusual twist, the fund was fully committed earlier this year before Eurazeo had confirmed who would lead it. That role will be filled by Singapore-based Albert Shyy, previously head of Asia at Burda Principal Investments, who was recruited for the job last month.

This is not Eurazeo’s first single-LP fund; it has experience with similar vehicles targeting areas like financial technology and healthcare in Europe with Allianz and Malakoff Humanis.

Nor is it uncharted territory in Asia. Eurazeo expects a final close on its second smart city fund targeting the region in the coming weeks following a first close of EUR 80m (USD 86m). Its first Asia smart city fund closed on EUR 137m in 2016.

“I’m starting to see more vertical-focused funds emerging in Southeast Asia recently. In this case, the cheque is on the larger side for this kind of focused approach, but I think we’re going to see more of this in the region in the coming months and years, although maybe with smaller fund sizes,” Shyy said of the insurance technology fund.

“I’ve heard several other GPs saying that as they’re fundraising, LPs are asking them to get things like this setup.”

The fund will invest across the Series B and C stages, establishing a compact portfolio of likely less than 10 companies. Shyy’s team will include an investment professional in Europe, but about two-thirds of the capital will be invested in Southeast Asia. The first deal, Indonesia’s Qoala, is considered exemplary of the strategy.

Eurazeo led a USD 65m Series B round for Qoala last month with support from Sequoia Capital India, Flourish Ventures, Daiwa PI Partners, KB Investment, and MDI Ventures among others. Strategic support came from the VC units of MassMutual, Jakarta-based microfinance specialist Bank BRI, and Mandiri, one of Indonesia’s largest banking and financial services companies.

Qoala, which provides retail insurance products in Indonesia, Malaysia, and Thailand, is the only insurance technology start-up with licenses in three Southeast Asian countries. It claims to have grown 30x since a USD 13.5m Series A led by BK and MDI in 2020.

There is a strong focus on affordability, speed, convenience, and ease-of-use through technology such as artificial intelligence-enabled claims processes. Operations include the distribution of microfinance products through partnerships with the likes of JD.ID, Shopee, and Kredivo.

Eurazeo’s single LP was doubtlessly impressed by its previous investment in Germany-based WeFox, which is sometimes called the largest insurance technology company in the world. WeFox raised a USD 650m Series C last year said to be the sector’s largest round ever at a valuation of USD 3bn. The plan is to enter Asia within two years.

“There is a lot of depth in insurance as a subsector of fintech, especially in this region,” Shyy said. “We’re seeing different types of microinsurance products being built to educate and build awareness in the market. Rather than trying to start people with something like life insurance, they’re doing things like gadget protection. It’s a much smaller bite-size and much easier for consumers to understand, so you can immediately see the impact.”

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• Topics
• Southeast Asia
• Financials
• Technology
• Fundraising
• Venture
• Singapore
• Eurazeo
• insurance
• Financial Services
• Fintech