CXA Group raises US$25 mil, on US$100 mil valuation, Eduardo Saverin joins board
By Anushia Kandasivam February 8, 2017
Biggest lesson learnt - company with best culture & talent, wins
- Aims to double revenue in 2017 to US$14 mil
SINGAPORE-BASED health technology startup CXA Group announced a US$25 million series B investment round on Feb 7.
The round is led by Boston Consulting Group-backed B Capital Group and Singapore-based EDBI. Other investors include Philips, RGAx, a subsidiary of Reinsurance Group of America Inc, NSI Ventures and Bioveda Capital.
The funds will be used to scale its existing cloud-based employee benefits platform and on-ground operations beyond Singapore and Hong Kong to include China, India, Indonesia, Japan, Malaysia, Philippines, South Korea, Taiwan and Thailand.
The expansion will start with the immediate hiring of teams in Singapore, Hong Kong and China. CXA aims to be in China in March, in partnership with Chinese conglomerate and investment company Fosun International’s brokerage Zhongheng Group. This will be followed by India, Indonesia, Malaysia, Philippines, Thailand, Taiwan and South Korea, with Howden Broking Group, which already has offices in these countries.
CXA’s traction has certainly attracted attention, and is a major reason it gained primary investment from B Capital Group. In fact, it piqued the interest of venture investor and Facebook co-founder Eduardo Saverin; he has also joined the CXA board.
“CXA is an exciting addition to our portfolio. Its unique business model cuts across three out of four of our focus industries, including health and wellness, financial services and consumer services, he said in an official statement.
CXA founder Roseline Chow Koo (pic, below) told Digital News Asia via email that CXA is looking into “acquiring more brokerages in new countries later”.
Plans and strategy
The funds will also be used to scale CXA’s software-as-a-service (SAAS) platform for distribution to SMEs and individuals via banks and insurers. CXA is already partnering with two large American banks and a European insurance company on this front.
According to Koo, getting the banks and insurers on board was not difficult, as they can gain various benefits out of the partnership. These benefits include: the ability to cross-sell relevant products, lower costs of sales and lowering administrative costs to a fraction of existing paper-based processing.
Further, CXA will offer clients with Pan-Asian operations integrated flexible benefits, data analytics, and wellness and benefits administration through its platform, allowing companies to get more out of their existing insurance spend.
CXA is also negotiating reduced future premiums from insurers for companies who are willing to improve their population’s health, with the purpose of getting employers to see the direct link between wellness initiatives and premium costs, and to allow them the returns on investments to justify their corporate health management programmes.
CXA’s platform integrates a health insurance brokerage solution, flexible benefit wallets, wellness marketplace and healthcare big data to provide employers integrated workplace wellness and benefits administration. Employees are able to use employer contribution to personalise benefits from a network of insurance, healthcare, wellness and fitness providers, and use online and mobile technology to manage insurance.
Founded in 2013, CXA went through its Series A funding in 2015, where it raised US$8 million. At the time, Koo said that CXA aimed to be a disruptive force across Asia by repurposing insurance and treatment spend into workplace wellness and prevention.
Almost two years on, it claims to have been successful to some degree. It now operates in Singapore and Hong Kong and there is enough regional demand for its services to justify the big expansion plan into Asia, and it has grown its team to 190 employees. It has also built an SME-specific solution to further its disruption ambitions, and successfully launched a pilot white-labelled portal of its SAAS platform for a large insurer to cross-sell individual insurance.
“Now that we’ve proven our brokerage and distribution models in Singapore, we’re using the proceeds to scale our technology and operations to 10 countries in Asia,” said Koo in an official statement.
Perhaps the most telling sign of its growth is that its targeted revenue for this year – US$14 million (SG$20 million) – is double that of last year. Koo also revealed that CXA’s valuation now stands at US$100 million.
Koo cited the awards and accolades CXA has gathered as further proof of success - HR Magazine’s Vendor of the Year for Best Corporate Wellness Provider for both Singapore and Hong Kong and Digital Insurer’s Asia Insurance Innovation Award. It was also selected to join the international non-profit organisation Innovations in Healthcare, which was founded by the World Economic Forum, McKinsey & Company and Duke Medicine and supports promising innovations that impact healthcare.
EDBI, which invests in knowledge- and innovation-intensive sectors, is a joint-investor with Philips under an alliance formed last year that focuses on investments into mid-to-late stage digital health companies with the ability to drive disruptive innovations in healthcare that improve healthcare access, outcomes and productivity in Asia.
EDBI CEO and president Chu Swee Yeok said that CXA’s innovative platform and its ability to reach and engage employees complements EDBI’s existing portfolio of digital health investments and its strategy to strengthen Singapore’s leading healthcare ecosystem.
Greg Goodfliesh, managing director of RGAx Asia, which focuses on building and partnering with innovative businesses that support the life and health insurance industry, added that RGAx is pleased to partner with CXA to help it develop innovative solutions to meet the growing challenges of rising healthcare costs.
"We recognise that workplace wellness initiatives empower employees to lead healthier and longer lives,” he said.
Koo revealed that even as CXA scales, her end game is a trade sale, though not for some time yet. “We have had acquisition enquiries from brokers, insurers and reinsurers, but we’ve just got started and have 10 more countries to build out,” she said.
As of now, CXA is concentrating on growth and building its team. “The biggest lesson I’ve learned is that the firm with the best talent and culture wins,” said Koo. “We are laser focused on attracting the best people in the industry, developing them via our new CXA Academy and retaining high performers.”
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