Scaling fast: How this healthtech startup aims to hit a $1b valuation

Health and insurance tech startup CXA Group is scaling fast. The company operates an online marketplace that connects insurance and wellness providers with businesses that want to tailor their employee benefits packages.

At a Bloomberg conference in Singapore this month, the firm announced its plans to raise at least US$50 million at a US$250 million valuation, in addition to the US$25 million it closed in March as part of its series B.

CX Group founder and CEO Rosaline Koo / Photo credit: CXA Group

The move was motivated by a surge in new business, led by CXA’s transition to “white label” its platform and license it out to its corporate clients.

As a result, the company is expected to achieve profitability next year and attain a valuation of US$1 billion by 2022, according to its founder and CEO Rosaline Koo.

Scaling the business sustainably

CXA’s fresh business model has accelerated its entry into various markets, where its new customers are present. To further enhance its value proposition, the startup has also expanded its digital services to increase accessibility. For example, people can use CXA’s e-wallet to scan a QR code at partner health clinics to pay for consultations directly from their insurance coverage.

But the continued market expansion and product development means more staff must be hired, piling up operational costs for the firm. So CXA is turning to machine learning to automate processes and free up workload for its employees, enabling them to focus on other business priorities.

“We know we need more developers because we’re building up in so many countries and [adding] so many more functionalities, so we’re automating the entire end-to-end process,” says Koo.

Insurance claims processing was one area CXA decided to streamline. To do so, it worked with AI provider Aida Technologies to co-develop a machine learning platform.

Koo met the Aida team while participating in the Infocomm Media Development Authority (IMDA) SG:D Techblazer Awards in 2018, where CXA won silver in the competition’s Most Impactful category. “We were sitting there, waiting to present [our tech solutions] to the judges, and we just started chatting,” she recalls.

From there, the companies formed a business partnership.

Getting external recognition

The collaboration with Aida wasn’t the only benefit CXA got from participating in the contest. According to Koo, being recognized at the competition boosted the company’s profile, making it easier to ink deals for its white-label service and putting it on the path to become a unicorn.

Photo credit: CXA Group

“All the awards we won last year helped our credibility, and led huge global institutions to start white labeling us and distributing our platform to their clients,” shares the CEO. Before this, the firm had been reaching out to banks and insurers for six years to have them license its software, with no luck.

On top of the company’s win at the Techblazer Awards last year, Koo herself was recognized in the 2018 Influential Brands Top CEO of the Year series and named Woman Leader of the Year at the 22nd Asia Insurance Industry Awards.

Such triumphs are important as it grants external validation for startups, says Koo. “It adds to your credibility when a big organization like IMDA validates your technology.”

She adds that it’s especially crucial for companies in the business-to-business space, where trustworthiness and depth of knowledge are critical factors that clients often consider first.

The IMDA SG:D Techblazer Awards is Singapore’s highest accolade for tech innovation and aims to recognize and endorse companies based in the city-state that exemplify the spirit of innovation in the development of tech solutions.

This year’s award ceremony will take place on November 5. Visit the Techblazer Awards website to learn more about the participating companies.