Health insurance startup raises series A ahead of expansion beyond China

While China has universal basic healthcare in name, the emphasis is on basic – people often pay from half to 70% of expenses out of pocket for minor ailments, according to a McKinsey study. Serious conditions like cancer or a huge accident can leave patients on the hook for sums that force them to sell their homes.

It’s not as bad as the US, but it’s far from the true universal health coverage enjoyed, for instance, in the UK and Germany.

Photo credit: Marcelo Leal / Unsplash

With rising incomes, Chinese people are increasingly opting for private insurance, while at the same time, private healthcare options are on the rise.

That’s the market that Sebastien Gaudin, a first-time tech entrepreneur with over 10 years of experience in pharmaceutical management, is going after with his China-based startup, The CareVoice. He tells Tech in Asia that the company has just secured series A funding worth “in the range of US$10 million.” It comes more than 18 months after raising US$2 million in seed funding.

Funding for new direction

Gaudin, 41, started the business in 2014 as what he calls “a TripAdvisor for healthcare” across China. But over the past couple of years, The CareVoice has morphed into something entirely different and more complex: an online health insurance service.

The Shanghai-based Frenchman pivoted away from doing a simple ratings-and-reviews app partly because it would require raising a lot of venture capital money to rope in users, with few options for monetization beyond advertising. It was also because he “observed the accelerating privatization of healthcare in China.”

A huge number of hospitals have been built across the country in the last three or four years, he adds, with the ratio of private facilities changing from 25% to 50%.

The startup’s trio of founders. L-R: Neil Liang, chief product officer; Jan Velich, chief business officer; Sebastien Gaudin, CEO / Photo credit: The CareVoice

So he shifted to becoming an enterprise startup that works with existing insurers, creating new technology and insurance policies for them. And then employers sign up their staff to The CareVoice, where members interact with their health insurance through the app. So, yes, there is still an app.

Reducing costs

The idea is that members can get more out of their insurance policy because it’s all laid out clearly in the app: a list of relevant clinics and hospitals they can go to, a feature for appointment booking, an insurance claims form, a full history of bookings and payments, a pharmacy, plus a “virtual nurse” to answer basic questions.

And so a policy, which is traditionally just a signed document handed to staffers, becomes less “passive” and more “proactive,” says Gaudin.

There are practical benefits as well. With claims done inside the app, paperwork is reduced, and there’s no need to call a hotline to process a claim.