Tencent-backed mutual aid site to be axed under China’s fintech crackdown
Tencent-backed Waterdrop has become the latest subject of China’s fintech crackdown today as it confirmed its online mutual aid platform will shut down at the end of the month.
The crowdfunding company provides customers with a basic health plan covering critical illnesses, where its 80m users share the risk of becoming ill and covering the medical costs.
Since late last year, China’s Banking and Insurance Regulatory Commission (CBIRC) has said all financial activities need to be overseen by regulators and businesses require licenses to operate.
However, the CBIRC does not license mutual aid platforms.
Waterdrop, with Tencent, Swiss Re, Boyu Capital and Meituan as investors, was valued at around $2bn in a funding round last August.
Meituan, a Chinese food delivery giant, also shut down its online mutual aid service in January.
China’s banking regulator urged last Friday that its new rules are not directed at specific firms.
Some firms have had a “relatively positive attitude” towards the changes, vice chairman of the China Banking and Insurance Regulatory Commission, Liang Tao, said.
Earlier this month, Tencent, Baidu and Softbank were all fined for deals that caused market concentration, according to China’s State Administration for Market Regulation.
The new rules, which are designed to stifle monopolistic behaviour and unfair competition, also triggered the collapse of a $35bn initial public offering by Jack Ma’s Ant Group in November.