Chinese online insurance platform Huize trims IPO target to $48m

Photographer: Victor J. Blue/Bloomberg

Huize Holding, the operator of an online insurance intermediation platform in China, plans to raise about $48 million after pricing its US initial public offering (IPO) at a range of $9.40 to $11.40, according to its latest filing.

The new target amount is way lower than the $150 million figure that Huize indicated when it first filed its IPO prospectus in September 2019. At the midpoint of the proposed range, Huize stands to raise $48 million by offering 4.7 million shares and would command a fully diluted market value of $561 million.

Huize, founded by Ma Cunjun in 2014, said less than 10 corporate investors have indicated interests in purchasing an aggregate of up to $50 million of the American depositary shares (ADS) being offered at the IPO.

Its prospectus showed that it plans to list on the New York Stock Exchange or the Nasdaq under the symbol HUIZ.

Focusing on China’s younger generation, Huize distributes insurance products and services with the aim of helping insurance firms serve a large number of purchasers, it said in its prospectus.

Its products cover two major categories—life and health insurance, property & casualty insurance products.

Based in Shenzhen, the company booked $108 million in revenue for the 12 months ended June 30, 2019. Its annual revenue in 2018 nearly doubled to $74.1 million from the preceding year.

The firm, which has served at least six million clients, turned to profit in 2018, reporting $400,000 in income in contrast to bearing losses in 2017. It made $900,000 in profit in the first half of this year, serving a cumulative 5.8 million insurance clients as of June 30.

A substantial portion of the firm’s client base is the younger generation, particularly life and health insurance clients. In the nine months ended September 30, 2019, the average age of insurance clients who purchased life and health insurance products through its platform was 32.

“Our online platform offers digitalized insurance experience and services efficiently and effectively through various internet and mobile internet channels, attracting the younger generation and meeting the growing trend in online insurance purchases,” the company said.

Huize disclosed that the proceeds from its IPO will be used to invest in technology and big data analytics to boost user acquisition and risk management capabilities. Part of the proceeds will also be used to further improve its product and cover general corporate expenses.

Among its principal shareholders is SAIF IV Healthcare Ltd, which owns a 21-per cent stake. The said fund is managed by Asian private equity and venture capital firm SAIF Partners.

Huize operates in the same space with online insurance giant Zhong An and newer player Waterdrop, a Beijing-based online insurance platform backed by Tencent. Waterdrop raised more than $145 million in its Series C funding round led by China-focused investment firm Boyu Capital in June.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.