Shanghai-based Chinacelerator has evolved as a platform alongside China’s growing markets, providing insuretech startups with support and access to succeed.
1. What is the story of Chinaccelerator?
Entrepreneurs need more than just capital when they start their business; they also need support to succeed. That's why Chinaaccelerator was born just over a decade ago – to help entrepreneurs find success. The concept has evolved with China’s market. As China has become very competitive, a new wave of innovation is addressing the need for the country to become more productive. The level of competition in China is so high, that if your solution makes clients competitive in China, then most likely will make clients competitive anywhere. We have actually always invested in companies from other markets coming to China. Now we also invest in companies targeting other markets, as some Chinese business models are also relevant in those markets. We’re already fully invested in Southeast Asia, and investing in countries such as Pakistan and Bangladesh. We’re currently looking at potential investments in Latin America.
2. What does your development program provide to startups?
We’re part of SOSV, which is a global venture capital fund. First and foremost we provide value to founders to build their business. We’re working with a range of startup companies to develop them. Besides providing capital, we provide access to clients and customers. We’re involved in the process; we provide insight into what works, and we help them navigate the challenges along the way. We’re currently working on our newest iteration, which takes us from being a program to becoming a platform. When a startup wants to scale needs customers or clients. In certain industries, this is more difficult in this regard, including the insurance industry. To build a product for a conservatively-minded insurer, for example, requires trust, and we help with those conversations between startup insurtechs and insurers that want a trusted partner for digital transformation to do things in a more agile way. For the entrepreneurs, we also ensure that they learn from every interaction, optimizing simple things like messaging, to the more complex parts of their business model and value proposition.
3. How important are insurtech startups to Chinaccelerator?
China is a great market for insurtech investments. There is a lack of legacy in China, which is an obstacle that does not exist and key and has been key for the speed that digitization has transformed people’s lives. Not only that but the growing middle class wants a better quality of life, and they are more concerned than ever to protect what they have for the future, and that means they increasingly want to insure things. There are four types of companies that fall under the insurtech umbrella for Chinaccelerator. The first type is specifically insurance technology companies, such as those providing a software solution used by an insurance company, such as claims management. The second sort is digital insurers that provide a customer-facing service to consumers. In most cases, they act as a managing general agent and partner with a traditional insurer as the underwriter. The third category of companies is not focused on insurance, but in other sectors such as healthcare, and the data they collect makes them desirable partners for insurers to work with closely. Lastly, there are those companies that are insurance distributors, using insurance products as an additional product that helps them improve the monetization of customers and the quality of their service.
4. Can you provide an example of an insuretech success story through Chinaccelerator?
CareVoice is an example of a company born in Shanghai, but it was started by foreigners – something that is unusual and difficult to achieve in China’s market. The company recently closed one of the largest series A investment rounds of a foreign-only team in China. What they’re doing is bringing a modern user experience to healthcare insurance. The problem has been that many people have healthcare insurance but they don’t understand how to use it. There is also a problem that private hospitals can over-treat, over-test, and overcharge. CareVoice created a user interface for the consumer, which attracted the world’s largest health insurer, Ping An, while providing a valuable service for patients seeking the right treatments to improve their use of health insurance and preventative healthcare. This is a smartphone-centered product, designed for China, which is the largest mobile-first and mobile-only market in the world. Since then they have started to expand outside of mainland China into two other Asian markets, and growth has been phenomenal. When you have a solution that is competitive in a market as difficult as mainland China, and you're able to deliver with scale for the largest insurance company, that means your solution is rock solid and growing nicely.