Softbank Group buy 5% ZhongAn's IPO for $522 million

Softbank Group buy China's first insurtech company worth US$11 billion ahead of an Initial public offering (IPO). ZhongAn online insurance company as one of the leading fintech service platforms in China has gained a lot of strategic confidence ahead of the IPO. SoftBank bought 5 percent stake or about 72 million shares in a stock offering worth up to US$522 million.

Tinuku Softbank Group buy 5% ZhongAn's IPO for $522 million

ZhongAn prepares to raise US$1.5 billion by an IPO scheme. Analysts expect the company to increase valuations of up to US$11 billion. Alibaba-backed ZhongAn was first launched in 2013 to compete China's Tencent-backed PingAn insurance giant.

SoftBank through Vision Fund agreed to become a major investor in an IPO on the Hong Kong Stock Exchange today at an offer price in the range of HKD$53.70 to HKD$59.70 per share. ZhongAn offers 199 million shares during the IPO. Softbank Group's investment represents about 36 percent of the shares offered today.

SoftBank was one of Alibaba's early investors with 28 percent and recently sold about US$7.9 billion of stock to pay off their debt and leave about 32.2 percent. SoftBank and Alibaba have also invested in many startups.

"ZhongAn is a clear leader in China's insuretech space. This strategic investment gives us a unique opportunity to participate in the promising insuretech market in the country," said SoftBank Group.

"We are taking a long-term view. With the latest technology, ZhongAn builds an innovative specialty online insurance business in China and effectively alters the insurance landscape there," SoftBank Group said.