Waterdrop, a China-based digital health insurance marketplace which counts corporates Meituan Dianping, Tencent and Swiss Re as investors, raised $360m in an initial public offering in the United States on Friday.
The company issued 30 million American depositary shares (ADSs) on the New York Stock Exchange last week, each ADS representing 10 ordinary class A shares.
Waterdrop priced the ADSs at $12 each, at the upper end of the $10 to $12 range it had set for the offering, valuing the company at over $4.7bn. The shares closed on $9.70 on the first day of trading on the New York Stock Exchange.
Private equity firm Boyu Capital bought $92.8m of shares in the offering while alternative asset management firm Hopu Investments purchased $38.8m of shares and an entity known as Kevin Sunny Holding $9.8m.
Founded in 2016, Waterdrop operates an online insurance marketplace as well as an insurance crowdfunding platform for patients with serious health conditions and high medical bills.
The company shut its mutual aid business in March 2021, with the intention of moving its mutual aid clients on to insurance policies. It almost doubled its revenue to $464m in 2020, though its net loss also increased, to $102m.
About half of the IPO proceeds will be used for Waterdrop’s planned expansion in the healthcare services and insurance sectors. It also plans to use the funding for research and development.
Waterdrop had received $150m from internet and gaming group Tencent in November 2020, after Tencent co-led a $230m series D round with reinsurance provider Swiss Re three months earlier that also featured IDG Capital and Wisdom Choice Global.
The company had previously collected $145m in a June 2019 series C round led by Boyu Capital with participation from Tencent, CICC Capital and Gaorong Capital.
Tencent had led Waterdrop’s $74.3m series B round in April 2019, investing with BlueRun Ventures, Gaorong Capital, IDG Capital, Sinovation Ventures, Wu Xiaoguang and Yuri Milner. Its other backers include local services portal Meituan Dianping and ZhenFund.
Peng Shen, chairman and CEO of Waterdrop, remains its largest shareholder, with a 24.4% stake post-IPO held in a family trust vehicle called Neptune Max Holdings.
Tencent’s Frame Investment subsidiary now owns 21.1% stake in the company while Boyu Capital holds 11.9%, Gaorong Capital 6% and Swiss Re’s Principal Investments Company Asia subsidiary 5.2%.
Goldman Sachs (Asia), Morgan Stanley and BofA Securities are lead underwriters for the IPO while ABC International Securities, China Merchants Securities, China Renaissance, Citic CLSA and Haitong International are also underwriters. They have a 30-day option to buy up to 4.5 million more ADSs, meaning it could reach $414m in size.