Chinese Insurance Tech Startup Cheche Group Mulls US Listing through SPAC

Following the itemizing of Waterdrop on the NYSE in 2021, practically two years later, one other Chinese insurance coverage know-how firm, Cheche Group, introduced that it will full its itemizing within the United States inside this 12 months. The firm signed a enterprise merger settlement with Prime Impact Acquisition I, a particular function acquisition firm, on January 29, and can full the backdoor itemizing within the third quarter of this 12 months. Once the itemizing procedures are full, the corporate’s ticker image will likely be modified to “CCG”.

Cheche Group was established in 2014 and is headquartered in Beijing the place it has an R&D middle together with a second facility in Guangzhou. Its major buyers embody Tencent, Shunwei Capital, China Broadband Capital (CBC) and different establishments. iiMedia’s report confirmed that Cheche Group is already the biggest impartial car insurance coverage service know-how platform within the Chinese market. The firm’s unaudited annual earnings in 2022 was about 2.5 billion yuan ($370 million). During the identical interval, the platform’s complete transaction premiums reached 15.2 billion yuan, a year-on-year improve of 36%.

Regarding the itemizing plan, Zhang Lei, founding father of Cheche Group, stated. “In the future, we will see that China’s insurance market and its digitalization will continue to grow rapidly. Among them, auto insurance is still the largest sector in China’s property insurance market, and China’s auto insurance market is the second largest in the world. It is estimated that the total premium of auto insurance will reach about 1.1 trillion yuan by 2026.”

According to the announcement, the pre-investment fairness worth of Cheche Group is round $760 million. After the proposed merger transaction, the brand new firm will likely be valued at about $841 million. The transaction is anticipated to usher in about $68 million in complete income to the corporate whereas nonetheless leaving open the likelihood for extra financing.

Mark Long, co-founder, co-CEO and CFO of Prime Impact, stated, “The transaction created an implied pro forma enterprise value of about $841 million. Considering the company’s technical capabilities, huge potential market, SaaS products and business model that is expected to achieve significant growth, this is still an attractive price.”

SEE ALSO: Waterdrop Reports Net Operating Revenue of $145.5 Million, Starts Share Repurchase Program Valued as much as $50 Million

It is kind of widespread for corporations desirous to checklist on a US inventory trade to interchange a conventional IPO with a SPAC as a substitute. SPAC, in essence, is the method of buying an unlisted goal firm through a merger, share buy, share trade, asset acquisition, reorganization and different types inside a specified time (often 2 years) after the preliminary public providing of funds by a shell firm with none precise enterprise operations.

According to the statistics of SPAC Analytics, as of the tip of November 2022, 552 corporations within the United States had accomplished listings through a SPAC deal, and the proportion of fundraising accomplished through a SPAC deal in comparison with all sorts of fundraising elevated from 19% in 2019 to 68%.

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