Healthcare services

Tencent, CICC back medical crowdfunding portal amid scepticism

Unfazed by critics over the legitimacy of its business model, Chinese healthcare crowdfunding site Shuidi raises $145 million from a star-studded list of investors.

Chinese healthcare insurance portal Shuidi has raised over Rmb1 billion ($145 million) in series C funding, underscoring institutional investor support for the innovative business model despite widespread public scepticism over its crowdfunding service. 

The three-year-old, Beijing-based startup said on Wednesday that the funding was led by Boyu Capital. Tencent, CICC and Gaorong Capital are among the co-investors.

The new capital raise comes just three months after Shuidi completed its $72 million series B funding with commitments from Tencent, IDG Capital and DST Global, among others.

Shuidi was founded by Shen Peng, a co-founder of on-demand services platform Meituan-Dianping. But unlike his previous firm whose services have been widely adopted in China, Shuidi has drawn much scepticism, particularly with its crowdfunding business. 

The crowdfunding service is one of Shuidi’s three product offerings. It allows patients who are unable to afford medical services to seek donations from the public. The idea is similar to that of Kickstarter, the crowdfunding portal that allows young startups to seek funding.

However, there are regular complaints over the fact that some of the cases are not actually lodged by real patients, or that some of the patients could actually afford the services themselves.

This problem is largely attributable to the fact that Shuidi has set little, if any, threshold for applying for donations. In response to the critics, the startup has said it is not in a position to assess the financial status of each applicant.

Some of the critics pointed out that Shuidi did not scrutinse its applicants because it needs to ensure it can attract more patients than its competitors, thereby maximising its share of the donations. This is despite Shen Peng claiming that the company does not charge the applicants or donors any fees. It doesn't charge hospitals either. 

Instead, Shuidi said it is able to feed its earnings through the provision of other two products, namely collective insurance and insurance distribution.

Its collective insurance platform, Shuidihuzhu, gathers people who are interested in the same type of insurance products and enter into a group insurance agreement with insurers. The policy fee is shared by the group and is, typically, only a fraction of the payment for individual insurance plans.

Meanwhile, its insurance distribution platform Shuidi Insurance Mall allows users to compare and buy healthcare insurance products from its 28-strong partners, including China Taiping Insurance, Pin An Insurance, PICC, Zhongan Online Insurance and MetLife.

Shuidi said it has nearly eight million users and has raised over $78 million for more than 3,900 families since its inception in 2016.

¬ Haymarket Media Limited. All rights reserved.
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