Tencent-backed Waterdrop said on Friday it would shut down its online healthcare mutual aid programme at the end of March amid China's tightening of financial technology regulations.
Waterdrop's mutual aid programme, which provides users with a basic health plan covering various types of critical illnesses and participants share the risk of becoming ill and bearing the medical cost, has served 80 million users, mostly in smaller cities in China, it said in a statement.
One of the leading providers in the mutual aid industry, besides Waterdrop, is Ant Group's [688688.SS] Xiang Hu Bao, which was launched in 2018 on Alipay and has since accumulated hundreds of millions of users. Others include ride-hailing giant Didi Chuxing.
Chinese food delivery giant Meituan shut down its online mutual aid service in January.
China's Banking and Insurance Regulatory Commission (CBIRC) has said since late last year that all financial activities needed to be overseen by regulators and all businesses needed to be licensed to operate. Mutual aid platforms are not licensed by the CBIRC.
Waterdrop, that counts Tencent, reinsurer Swiss Re, Boyu Capital and Meituan as investors, was valued at about $2 billion in a funding round last August. It has been planning a U.S. IPO to raise about $500 million, IFR has reported.
Founded in 2016, Beijing-headquartered Waterdrop runs three core businesses – Waterdrop Insurance Mall, Waterdrop Mutual and Waterdrop Crowdfunding.
(Reporting by Yingzhi Yang and Ryan Woo in Beijing; editing by Jason Neely)
