SoftBank to invest $100m in Chinese insurtech JV

Japanese multinational SoftBank, one of the most prolific fintech investors, is set to spend $100m on a joint venture with Chinese digital insurer ZhongAn Online.

The investment will be made via SoftBank’s Vision Fund which has used some of its $100bn of capital to acquire stakes in tech firms such as Uber and Indian digital payments firm Paytm.

According to a report in the Financial Times, the new JV is designed to expand the technology side of ZhongAn’s business which has increasingly focused on blockchain and artificial intelligence-based projects.

ZhongAn was launched in China in 2013 by PingAn Insurance and e-commerce firms Tencent and Ant Financial as a digital-only insurer.

However, while ZhongAn has attracted more than 300m customers it has failed to generate a profit due to the small margins involved in its insurance business. It reported a $95.40 million loss for the first half of 2018

Consequently it has sought to expand the technology side of its business. More than half of its 3,000 staff are engineers and technicians.

According to Zhong An’s chief financial officer, Vincent Tang, the joint venture will primarily focus on using Zhong An’s technology for the companies within SoftBank’s existing portfolio.

“They use their network, we use our technology,” he told the FT. “The natural [strategy] was to go to SoftBank’s portfolio. Working on that will help us take the company global.”