company raised $360 million after pricing shares at the top of the range – at a valuation of nearly $5 billion, or 100 times historical sales.
Waterdrop is one of many startups that started out selling “mutual aid” services, a largely unregulated business in which members contribute small monthly amounts in exchange for a guaranteed lump-sum payment for critical illnesses. In March, Waterdrop closed down the unit. What’s left is mainly an online marketplace for insurance with ugly financials. The company has run at an operating loss since 2018 yet founder Shen Peng told Reuters “becoming profitable is not our priority”.. But until a profitable model is found, best not price too aggressively.
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