On the evening of May 7, Beijing time, Waterdrop Inc., a company that received early-stage investment from Jubilee Tech Fund, officially listed its shares on the New York Stock Exchange (NYSE). Affected by the Covid-19 pandemic, Waterdrop chose to hold a cloud-based listing bell-ringing ceremony at the Hyatt Regency Wangjing Hotel, located not far from Waterdrop’s headquarters.
On this day, one day shy of the fifth birthday of the founding of Waterdrop(WDH.US), has landed on the NYSE with its leadership position as the first Chinese insurance technology stock. The prospectus shows that WDH’s revenue had grown from 238 million yuan in 2018 to 1.511 billion yuan in 2019 and 3.028 billion yuan in 2020.
Five years ago, founder Shen Peng started his company from the pain points of the insurance industry. He led his young team, through product innovation such as Waterdrop Mutual Aid, Waterdrop Medical Crowdfunding, Waterdrop Insurance Marketplace, etc., through meticulous product design and promotion, hit the point of Chinese users’ needs and quickly achieved significant traffic and user accumulation. A cumulative total of more than 350 million caring people have provided help, and the platforms have raised more than 37 billion yuan to help patients with major diseases. In 2020, Waterdrop Insurance achieved first-year premiums of over RMB 14.4 billion. As of December 31, 2020, the cumulative number of paid policies for Waterdrop Insurance reached 30.7 million. It has become the fastest-growing internet health protection platform in China.
Calculations through the prospectus show that Waterdrop has invested RMB 2.536 billion in 2019 and 2020 to acquire 17.5 million paid insurance users. The customer acquisition cost for a single paid insurance user was only RMB 144.91. The company is in a dominant position among many listed Chinese Internet companies in terms of customer acquisition cost, and there is room for further improvement and enhancement.
Shen Peng, founder and CEO of Waterdrop, said on the day of the IPO: the company is still aiming to expand its scale, and Waterdrop has only been established for five years and is still in the early stage of growth and development. In the future, the company will continue to develop its platform and other products, including health services. At the same time, as the scale increases, Waterdrop can also better evaluate each potential customer’s profile and expected value, and match the potential customers with the right insurance products, thus reducing the cost of customer acquisition.
Along with an aging society in China, Shen Peng and his fellow team are shaking up China’s dormant insurance market through innovations, drop by drop like water. In explaining the stock code WDH, Shen Peng said, “WDH also means length, width and height, and dripping water into rivers eventually merges with the ocean.”
How wide is the blue ocean of China’s insurance market? How deep is it? We’ll see.
Jubilee Tech Fund invested in Waterdrop in August 2017 and followed in the next round.