Hong Kong-based virtual insurer OneDegree has secured $27 million in funding to fuel its expansion in Asia, with Vietnam identified as an important market for its technology platforms and insurance offerings.
The funding round to support its expansion in Asia and investments in AI was held on June 29. The investment came from global financial institutions as well as existing backers such as Gobi Partners, BitRock Capital, and Sun Hung Kai & Co, according to Bloomberg.
The company's co-founder Alvin Kwock mentioned that the new investors will be announced later due to a strategic partnership.
Initially focused on pet insurance, OneDegree has expanded its offerings to include parcel, fire, home, and health insurance. It also provides coverage for digital assets against hacking, malware, and theft. The firm raised $28 million in a funding round last year and anticipates the need for another round before considering an initial public offering.
Kwock stated that based on their schedule, they expect to generate a profit by the end of 2024. Despite being approached for a SPAC listing, the company plans to go public only after achieving a larger business scale and turning profitable.
OneDegree experienced an underwriting loss of HK$74.4 million ($9.5 million) in 2021, an increase from HK$28.1 million (around $3.6 million) the previous year, according to the Insurance Authority. The demand for digital asset insurance is growing rapidly in Hong Kong as it aims to establish itself as a hub for the crypto industry.
The Securities and Futures Commission, the market regulator in Hong Kong, requires insurance coverage for firms to obtain a virtual asset trading platform licence. OneDegree has already received over 100 inquiries for digital asset insurance this year, with half of the potential clients located outside Hong Kong.
Recently, OneDegree entered into a partnership to integrate Microsoft's AI service into its automated chat box and cybersecurity solutions.
Bloomberg also mentioned that OneDegree has been providing its technology platforms to insurance companies in Malaysia, Taiwan, and Vietnam, and is now aiming to expand further across Asia and into the Middle East.
Founded in 2016, OneDegree is part of a new generation of insurers that is reimagining the industry with technology.
The company stated, "We are one of the first in Hong Kong to receive a virtual insurance licence. Our mission is to make insurance simple, transparent, and do what it was always meant to do – protect us from the risks that come with life, whether big or small."
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