Hong Kong’s OneDegree Raises $27 Million for Asia Expansion and AI Advancements

Hong Kong-based virtual insurance firm OneDegree has successfully concluded a fresh funding round, raising $27 million. The funds will be used to support the company’s expansion across Asia and invest in artificial intelligence.

Global financial institutions, along with existing backers such as Gobi Partners, BitRock Capital, and Sun Hung Kai & Co., have contributed to the funding. The names of new investors will be disclosed at a later date when announcing their strategic partnership.

This marks the fifth successful fundraising effort since the company’s inception in 2016, bringing the total funds raised to over $97 million.

OneDegree, which initially offered pet insurance, has expanded its product range to include coverage for fire, home, health, and digital assets against hacking, malware, and theft.

In 2021, the firm raised $28 million in a funding round. Alvin Kwock, a former JPMorgan Chase & Co. executive and co-founder of OneDegree, stated that the company anticipates one more funding round before considering an initial public offering.

OneDegree is among the four licensed online insurers in Hong Kong, in line with the initiative by the Hong Kong Insurance Authority to integrate technology in the insurance sector for improved services and cost reduction.

Online insurance, which differs from traditional insurance, offers lower premiums as policies are directly purchased from the insurer through the internet rather than via an insurance agency branch. The license granted to OneDegree prohibits hiring agents, and sales are exclusively conducted through online platforms or mobile apps.

The digital insurance provider projects profitability by the end of 2024, according to co-founder Alvin Kwock. While approached for a special purpose acquisition company (SPAC) listing last year, Kwock stated that OneDegree intends to go public only after achieving a larger business scale and becoming profitable.

In 2021, OneDegree reported an underwriting loss of HK$74.4 million, a wider deficit compared to HK$28.1 million in the previous year, as reported by the Insurance Authority.

However, the company has experienced substantial growth, with monthly revenue quadrupling over the past two years. This growth has been driven by the increasing popularity of their direct-to-consumer insurance products, such as pet, fire, home, and health insurance.

OneDegree is rapidly expanding its business operations and is on a clear trajectory toward profitability by the end of 2024. Additionally, their virtual asset insurance service, which will be launched in April 2022 through OneInfinity, is already accessible to ten virtual asset exchanges, custodians, and asset managers, with over 100 inquiries received from virtual asset service providers.

The Hong Kong startup has collaborated with Microsoft Corp., incorporating the tech giant’s AI service into their automated chatbox and cybersecurity solutions.

Expanding its reach beyond Hong Kong, OneDegree has actively provided innovative technology platforms to insurance companies in Malaysia, Taiwan, and Vietnam. Co-founder Alvin Kwock aims to further extend their presence across Asia, with the Middle East identified as their next target market.