Insurtech firm CXA to sell brokerage unit as it doubles down on SaaS business

Insurtech startup CXA Group announced plans to restructure its business to focus “solely” on its enterprise software-as-a-service (SaaS) business.

The Singapore-headquartered company is set to sell its brokerage business in the city-state and in Hong Kong to global employee benefits broker Pacific Prime. However, CXA did not disclose the sale amount.

Rosaline Chow Koo, founder and CEO of CXA Group / Photo credit: Tech in Asia

According to the company’s founder and CEO, Rosaline Chow Koo, CXA’s SaaS business grew 218% in 2020 and drove 45% revenue growth across all their business.

Koo told Tech in Asia that the company is doubling down on its SaaS business as a result of the segment’s growth last year, owing mostly to the Covid-19 pandemic.

Last year, CXA’s SaaS business raked in 70% of its revenues, while the other 30% came from its brokerage business.

While the firm had intended on raising between US$75 million and US$100 million in September last year, the sale of its brokerage arm means it will no longer be looking for additional funding, Koo said.

“Last year, our enterprise SaaS business, which we invested in over the last two years, saw a surge in demand, not only in Asia, but in Europe. We grew by 218%, and that’s from nothing in [comparison to] 2019,” added the CEO.

The startup will use the money from the sale to fuel its expansion plans across Asia and into Europe. It will also be used to support banks, insurers, and payroll companies to leverage CXA’s benefits and its health and wellness platform.

“As insurance companies speed toward becoming more digital businesses, the industry is looking for advanced solutions to accelerate this transformation,” she added.

In May last year, the company raised an undisclosed amount of funding from Humanica and HSBC Life International. Before that, it closed a US$25 million series B round co-led by B Capital Group and EDBI in 2017, and an US$8 million series A round in 2015 led by NSI Ventures.

See also: Behind CXA’s difficult journey to launching its ambitious insurtech platform

Founded in 2013, CXA’s platform allows corporate and retail customers of banks and insurers to access discounted benefits and health and wellness products.

It offers its SaaS product to small and medium-sized businesses and retail bancassurance platforms in Mainland China, Hong Kong, and Singapore and provides an employee benefits and health platform in Thailand.