Telecom and internet group SoftBank invested $500m in China-based online insurance platform ZhongAn Online Property and Casualty Insurance yesterday as part of the latter’s $1.5bn initial public offering, Reuters reported.
ZhongAn issued approximately 199 million new shares on the Hong Kong Stock Exchange priced at HK$59.70 ($7.64) each, at the top of the HK$53.70 to HK$59.70 range it had set. SoftBank acquired a stake sized at just under 5% for its investment.
The offering, the largest for a financial technology provider ever to take place in Hong Kong, is also the first in any country by an insurance technology producer, according to the Financial Times.
ZhongAn’s online platform provides upwards of 300 specialised insurance packages, its most popular being the option to append insurance to e-commerce purchases in order to cover the cost of returning the goods.
Chief financial officer Francis Tang said the company intends to use the IPO proceeds to expand into other areas including life and health insurance, according to Reuters.
Internet group Tencent, insurance firm Ping An and Ant Financial, the financial services affiliate of e-commerce company Alibaba, formed Zhong An in 2013. The first two owned 12.1% stakes pre-IPO while Ant Financial’s stood at 16%.
Investment banking firms Morgan Stanley and China International Capital, alternative asset management firm CDH Investments and hedge fund sponsor Keywise Capital Management subsequently took part in a $934m round for ZhongAn in 2015 that was closed at an $8bn valuation.