Top 16 Seed Investors in Eastern Asia’s Insurance Industry

Intro

Unlike many other rapidly developing fields, the Insurance industry is among the most steady-growing ones. As an example, its estimated CAGR over the 2016-2020 period worldwide is only 2.2%, which is a considerably lower share than the growth rate of the Marketing (12.8%) or, to say, E-Commerce (19.42%) spheres. In addition, as many organizations report, the COVID-19 pandemic and its consequences impacted the market rather negatively: according to OECD’s “Global Insurance Market Trends 2020” report, life insurance gross premiums written saw a 2.2% decrease in 2020 (from €447B in the first half of 2019 to €369B in the same period of 2020).

Nevertheless, some aspects of the industry show positive dynamics (for instance, the profit from non-life premiums written over the same time rose from 272 to 282 billion euros). Professionals in the Insurance field are also adopting new technologies to reinforce the services they provide, such as life, health, automotive, and other kinds of insurance. For instance, implementing AI to save time and reduce costs has proven effective in automatizing some processes and providing clients with highly personalized products.

Having such potential for development, the industry keeps engaging VCs and corporate investors from different regions of the world. In Eastern Asia, for example, seed funding for the last 4 years made up 131.4 million US dollars, which accounts for a 7% share of all seed money attracted to the Insurance sphere over that time. Arranged by the sums of money they contributed, 16 most active investors can be presented as follows:

Top 16 Seed Investors in Eastern Asia’s Insurance Industry
data provided by Unicorn Nest

Key takeaways

• Funds Geography – The majority of the listed VCs are based in Japan; the rest are coming from China. As for the city grouping, 9 funds are hosted in Tokyo, other 7 – in the Chinese cities of Beijing, Shanghai, and Hangzhou. The most common city is Tokyo which is home to 9 funds. Most commonly, the financing is attracted by startups from Japan, the United States, and China. Rarely, the VCs also invest in Kenya. The country of the fund’s investment and the project’s origin usually appear to be the same.
• Industry Focus – Most frequently, the companies take into consideration Finance projects; Medical Services, Gamification, and Telecommunications follow.
• Important Years – While the newest company, Kepple Africa Ventures, was created only two years ago, in 2019, the oldest one, SoftBank, was established in 1981. As for the rest, many funds emerged in 2010. The majority of the deals were handled from 2014 and up to 2020, the top of activity occurring in 2019 for several firms. The same year was the one with the maximum of successful exits for some funds; for others, this happened through 2005-2020.
• Investments – Usually, VCs participate either twice or 7-12 times per year. With an average value of 126.8, the maximum and minimum of funding rounds are 687 and 2, possessed by ZhenFund and Kuanping Capital, respectively. The median for this figure is 68.5. The highest number of lead investments per fund is around six-fold lower, only 113; the average value (21.6) and the median (5.0) for this type of financing are fairly lower as well. Most commonly, the listed companies have never chosen to lead any rounds at all. The interval where the difference of lead investments from the average lies ranges from -11 to 29 percentage points. On average, this difference reaches 13.18; the median is 16.12. A conclusion can be drawn that particular funds from the list act as lead investors more often than others. The most common value for the given data is 29.0.
• Typical Rounds – Rounds for the sampled funds usually show 2-4 investors participating; the value of one round commonly does not exceed 100 thousand. Less often, the size plummets up to 100-500 million US dollars. The maximal portfolio company multiplier is 0.7, with an average value of 0.13 and a median of 0.02. For the majority of the VCs, however, this indicator’s average value is 0.0.

Summing up, the most significant part of seed money for startups in the Insurance industry of Eastern Asia is provided by funds from Japan and China. Apart from their establishment countries, the listed companies prefer to invest in the United States and Kenya, participating in 2 or 7-12 rounds per year. The investment focus covers several industries: Finance, Medical Service, Gamification, and Telecommunications.