Online pet insurer OneDegree raises US$28 million amid strong investor appetite for Hong Kong digital start-ups
- Success of fundraising exercise suggests investors are still confident about digital insurance start-ups in Hong Kong, co-founder says
- OneDegree is, in fact, just the latest Hong Kong start-up to announce its fundraising plans over the past seven days
The start-up is among four purely online insurers that started operations last year as part of a push by the Hong Kong Insurance Authority to promote the use of more technology by the insurance sector to reduce costs and enhance services. Such companies can only use the internet and apps to sell their products and cannot hire agents.
“The success of our fundraising exercise indicates investors are still confident about digital insurance start-ups in Hong Kong,” said Alvin Kwock Yin-lun, OneDegree’s co-founder and a former JPMorgan banker.
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“China’s regulatory crackdown may have led to a sell-off in Hong Kong and mainland stocks recently, but investors still believe in the long-term development of the country,” said Robert Lee, vice-chairman of industry body Hong Kong Securities Association. “In addition, the latest tightening has led companies rethink going public in the US, with more planning to list in Hong Kong instead,” he added.
Hong Kong logistics company Lalamove was considering shifting its planned US$1 billion initial public offering to Hong Kong from the US, according to a Bloomberg report last month, against the backdrop of Beijing’s crackdown.
Kwock said OneDegree would keep an open mind about going public, and that it would like to develop its business on a larger scale first. The proceeds from its latest funding round will be used for developing new products and markets, and doubling its headcount in the next one year to more than 300 people.
The online pet insurer has now conducted four fundraising rounds since its establishment in 2016, bringing its total funds raised till date to more than US$70 million.
The company currently has 90,000 customers and is known for its core pet insurance products. OneDegree also sells products through partners in Shenzhen, Singapore and Taipei, and is building partnerships in Europe as well.
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“China has 100 million dogs and cats, while Hong Kong has over 600,000 pets. The pandemic has led more people to raise dogs and cats after being forced to work from home. The demand for pet insurance is huge,” Kwock said.
He added that OneDegree will develop other personal medical insurance and general insurance products. “We aim to develop OneDegree to be among the top three general insurance companies in Hong Kong by 2025,” he said.
