Sequoia-China-Led $140M Series Angel Round Fuels Aiwow Tech's Push in Health Insurance Technology Ahead of Hong Kong IPO Filing

In terms of market trends, capital is undoubtedly the most sensitive.

Today, VCBeat learned that Shanghai Nova Technology Co., Ltd. (“Nova Technology”), a health insurance technology enterprise, has secured an angel round financing of RMB 100 million. The round was led by HongShan, with participation from Kuanping Capital.

The health insurance sector, in which Nova Technology operates, has been one of the hottest tracks in recent years. The market size of health insurance reached RMB 544.813 billion in 2018, with a compound annual growth rate (CAGR) of 35.95% over the past five years, and is poised to become a trillion-yuan market in the future. As the sector continues to thrive, insurtech innovators focused on the health insurance market are increasingly gaining favor from investors.

Nova Technology, which has secured investment from HongShan China, is dedicated to empowering the health insurance value chain with digital technology. Incubated by ZhongAn and established in October 2018, the company is less than a year old. Why has it earned the favor of HongShan China?

Zhai Jia, Managing Director at HongShan China Fund, stated, “As an independently operated company, Nova Technology embodies ZhongAn’s years of accumulated expertise in health insurance operations and technological capabilities. In the fields of claims processing and risk control, we have been particularly impressed by the team’s professional competence and technical strength. Lu Min, the current CEO of Nova Technology, brings extensive experience in both the insurance and technology sectors. We are confident that under his leadership, Nova Technology will create valuable, integrated, closed-loop services for the health insurance industry and lead its development.”

With the overall explosion of the health insurance market in recent years, the rapid growth in premium volume and policy count has made manual underwriting, claims processing, and risk control unable to meet business demands, creating an urgent need for data- and system-driven solutions. In the process of developing and validating technology-enabled health insurance, the sector has demonstrated significant potential and promising prospects across various niche segments.

“We found the health insurance technology sector to be sufficiently large and broad. By operating independently, a team can maintain a stronger sense of urgency, greater vitality, and more breakthrough potential, enabling it to gain momentum in the sector more rapidly. Additionally, for companies involved in exporting system services, independent operations are more readily accepted by the industry,” explained Lu Min, regarding the rationale behind the spin-off at that time.

This means that Nova Technology has set its sights on the entire industry. Following its independence, Nova Technology aims to build its own closed-loop health insurance service ecosystem. Leveraging digital capabilities, it will provide integrated health insurance solutions—including product customization, risk control, claims services, and system services—to address key industry pain points such as weak risk management in health insurance, poor claims service experiences, high product homogenization, and difficulties in acquiring precise traffic.

Jiang Xing, CEO of ZhongAn Insurance and Chairman of ZhongAn Technology, has placed high expectations on this move. He stated, “We hope that after Nova Technology operates independently, it can leverage the technological capabilities and valuable experience accumulated by ZhongAn during the rapid development of its health insurance business, thereby creating value for the industry’s growth.”

In recent years, health insurance has been one of the fastest-growing segments in the industry. In the first half of 2019, gross written premiums for health insurance increased by 32% year-on-year. However, during the same period, the growth rate of health insurance claims began to outpace premium growth, reaching a year-on-year increase of 37%. Enhancing claims management and risk control capabilities has become an urgent priority.

The challenges facing commercial health insurers are that they not only struggle to effectively control behaviors such as insuring with pre-existing conditions, irrational drug use, and excessive medical treatment, but also lack the systematic capability to analyze data on disease incidence rates and medical expenditure ratios, thereby failing to meet users’ personalized and differentiated needs for health protection and services.

These have become the primary areas of exploration and practice for Nova Technology: leveraging cutting-edge technology to integrate the data ecosystem with traditional services, thereby enhancing services across all segments of health insurance. Lu Min believes that continuously building a “high-speed channel” for medical data is the cornerstone of breakthroughs in the health insurance industry. On this foundation, the integrated consolidation of ecosystem resources with professional capabilities in technology, risk control, and services to provide closed-loop, menu-style service offerings represents the core need for industry development.

While introducing novel AI technologies such as natural language processing and integrating medical regulations from various regions and numerous hospitals to construct a disease-centric medical knowledge graph encompassing pharmaceuticals, diagnostics and treatment, materials, and surgical procedures, Nova Technology also leverages big data analytics and machine learning algorithms like deep neural networks. This approach enables the automated decomposition and cognitive analysis of insurance and medical information across multiple stages, significantly reducing the costs associated with manual intervention.

With the implementation of a series of digital capabilities and integration with its extensive healthcare ecosystem, Nova Technology’s products are undergoing continuous enhancement. Its MDP platform has enabled clients to digitally and automatically process over 15% of claims cases, with claim payments settled in as little as three minutes. In terms of risk control, Nova Technology has established a comprehensive risk management service system covering the entire lifecycle from pre-underwriting to post-claims stages. This risk control system has helped clients achieve loss reduction of approximately 10%.

Currently, Nova Technology has partnered with approximately 20 insurance companies and the health insurance divisions of internet platforms, primarily providing them with intelligent claims processing and investigative risk control services for health insurance.

Incubated by ZhongAn, led by HongShan, and operating in a high-growth sector... Nova Technology was born with such a dazzling array of accolades. Yet market dynamics are ever-changing; where will Nova Technology head in the future?

“Three years.” Nova Technology has set this timeline for itself. “We aim to become the leader in the health insurance technology market within three years, deepen our industry expertise, and provide menu-based, closed-loop, integrated services to the health insurance sector. In this process, we will also continuously build up our ecosystem service capabilities to deliver richer and broader value to the industry,” said Lu Min.

To continuously deepen and enrich value creation, it requires not only technology but also a profound understanding of health insurance, as well as deep expertise in the healthcare sector, thereby leveraging high professional standards to drive the digital transformation of the health insurance industry.

Regarding the RMB 100 million in financing secured at the angel round, Lu Min stated, “The investments from HongShan and Kuanping have endowed Nova Technology with a broader industry service perspective and capabilities. Coupled with Nova Technology’s inherent strengths in the health insurance sector, we are confident that we will rise to the occasion.”