Hong Kong-based insurtech startup MediConCen–an honoree of the inaugural Forbes Asia 100 to Watch list in 2021–announced Wednesday it raised $6.85 million in a Series A funding round led by HSBC Asset Management, as insurance solutions remain a bright spot amid a regional investment downturn in fintech.
Participating in the round were existing investors G&M Capital and ParticleX—a startup accelerator funded by billionaire Tang Yiu’s investment firm, Shine Works. They were joined by new investor Wings Capital Ventures, a fintech-focused VC firm backed by the Hong Kong family that founded Wing Lung Bank. The Series A round brings the six-year-old startup’s total funding raised to $12.7 million. MediConCen declined to disclose its current valuation.
“We are supportive of MediConCen’s aim to improve this experience by simplifying and speeding up the claims journey, including ensuring that the claim amount is fair, with a technology backbone that supports the scaling up of these benefits,” said Kara Byun, head of fintech, venture and growth investments at HSBC Asset Management, in a statement about the funding round.
The fresh capital will go towards international expansion in the Middle East and Southeast Asia, MediConCen said. The startup claims it has assisted over 1 million policyholders and works with 16 insurance companies, including AIA’s Blue Cross, Heng An Standard Life, China Life and virtual insurer Bowtie, which was an honoree of the 2023 Forbes Asia 100 to Watch list.
Founded in 2018 as an incubatee at Cyberport, a Hong Kong government-backed high-tech industrial park, MediConCen uses blockchain technology to automate medical insurance claims. By using digital signatures and smart contracts, the startup claims it can reduce fraud.
“I see a lot of existing insurtech startups, they’re either built by the people working inside the insurance industry, or by a pure tech company…they are trying to use old technology to solve old problems,” says William Yeung, cofounder and CEO at MediConCen. “We’ve become the bridge to apply the latest AI and blockchain technology into a real problem that exists, and that differentiates us from our peers, who are either strong in insurance or strong in the technology side.”
Still, third-party insurtech solutions may take time to gain traction with incumbent insurers, as these established players may be highly risk-averse and lack the necessary supporting infrastructure to embrace new solutions, according to the Hong Kong Monetary Authority’s fintech promotion roadmap from last August, citing survey respondents. Third-party fintech solutions contributed roughly 70% of the digital transformation efforts of financial institutions in Hong Kong, wrote the roadmap’s authors.
“Insurance is a great business, and they don’t have an urgency to change because business is good,” says Jonathan Wu, founding partner of Wings Capital Ventures. “In Asia, the penetration is low, so they need to push their agents to sell more policies…they realize their technology needs, and adoption for digital solutions is accelerating.”
Fintech investment across the Asia-Pacific region fell to $10.8 billion in 2023, down more than 75% from $51.3 billion in investment in 2022, according to a February report by KPMG. Lack of investment exits and investors focusing their attention on AI are some of the reasons for the decline, the report explained. A growing number of startups are taking aim at enhancing the activities of financial institutions, while insurtech and wealthtech are growing areas of interest for investors, the report added.
Insurtech was a major field for the Forbes Asia 100 to Watch lists. In addition to last year’s honoree, Bowtie, which secured $35 million in a Series B2 funding round last September led by insurer Sun Life Hong Kong, the list featured Hong Kong-based OneDegree, an honoree of the 2022 Forbes Asia 100 to Watch list, received an undisclosed investment from Dubai Insurance to help the startup expand in the United Arab Emirates.
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