No profit, no problem: Why VCs poured $47 million into loss-making Qoala

IN FOCUS

In today’s newsletter, we look at:

* Why unprofitable insurtech firm Qoala still managed to secure a large series C investment
* What the strong inflows of credit into Asia mean for borrowers in the region
* How the humble QR code is shaking Vietnam’s payments scene

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Hello there,

I once interviewed the founder of an insurtech firm who said that he wanted to bring “insurance and love closer together.”

I didn’t love insurance then, and I still don’t love it now.

Maybe that’s a sign of how fortunate I’ve been. After all, the fact that I haven’t had to claim a payout from an insurance policy means that nothing bad has happened to me so far.

Whatever the case, the insurtech industry continues to see tremendous growth. In this week’s featured story, my colleague Budi notes that Indonesia’s Qoala has generated US$280 million in gross written premiums since 2020, with 52% of that recorded in 2023.

Investors appear to like what they see, even though Qoala has yet to turn a profit. The company has just raised US$47 million in a series C round led by PayPal Ventures and MassMutual Ventures, bringing the total capital raised to nearly US$140 million.

Budi’s article explores why, even amid today’s high interest rates, investors are willing to look beyond the bottom line to bet on Qoala.

On the topic of high interest rates, I take a closer look at how this hasn’t stopped a wave of credit from coming into Asia, with nearly half a billion dollars worth of funding for lending to MSMEs and startups being announced over the past week.

— Simon

THE BIG STORY

Why is Paypal’s VC arm betting on Qoala despite the insurtech firm being in the red?

Image credit: Timmy Loen

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