Domestic Major GA Ez Financial Services Becomes Largest Shareholder of Bomap
Hana Ventures and KB Investment FI Exit in 'Uncertainty'
[Asia Economy Reporter Kwangho Lee] The valuation of Insurtech (insurance + technology) startup Bomap has significantly declined. Once recognized as a leading first-generation insurtech company, it now faces management difficulties. Attention is focused on its future course.
According to the investment banking (IB) industry on the 29th, Bomap secured a strategic investment of 5 billion KRW from Ez Financial Services, a major domestic GA (corporate insurance agency). The two companies plan to launch services combining digital platform experience with insurance sales channel expertise through this investment.
Bomap’s 'Coverage Fitting' and 'Health Analysis' solutions will also be applied to Ez Financial Services’ sales channels. Since the first half of the year, they have jointly developed and provided one-on-one customized professional consulting services for Ez Financial Services’ planners through the Bomap platform.
Ryu Jun-woo, CEO of Bomap, said, "This investment allows us to continue innovating the insurance market," adding, "We will establish a win-win model between fintech and traditional GA to provide customers with new experiences and value in insurance."
Securing investment amid difficult market conditions is noteworthy. However, the prevailing view is that this investment is effectively a merger and acquisition (M&A), not just a simple capital injection. Ez Financial Services participated solely in Bomap’s third-party allotment capital increase, becoming the largest shareholder.
Particularly, attention is focused on this valuation. Bomap was valued at approximately 4.8 billion KRW. It is very unusual for the valuation to be lower than the investment amount. Compared to the previous valuation of 63 billion KRW, this represents a tenfold decrease. Typically, higher valuations are presented when attracting additional investments, but Bomap has noticeably retreated.
Bomap’s crisis began in earnest last year. The enforcement of the Financial Consumer Protection Act in October last year had a significant impact. Due to this law, Bomap had to discontinue its core business of customized insurance comparison and recommendation services. Additionally, it stopped insurance sales services operated through its subsidiary Bomap Partners. As a result, losses increased. Last year, it recorded sales of 360 million KRW and an operating loss of 6.7 billion KRW.
Because of this, it was difficult to attract additional investments from financial investors (FIs). Facing a situation where the business would have to be halted without external funds, Bomap secured a strategic investor (SI) even by lowering its previous valuation. Existing shareholders reluctantly agreed to this investment.
FIs that have invested in Bomap so far include Hana Ventures, KB Investment, Lotte Accelerator, and DS Asset Management. In addition, Hyundai Marine & Fire Insurance and People Life participated as SIs, playing a role in Bomap’s growth. The total accumulated investment secured so far amounts to 21.5 billion KRW. However, the industry evaluates that the path to exit for these investors has become virtually impossible.
A venture capital official said, “When I heard that Bomap’s valuation was 4.8 billion KRW, I thought I misheard,” adding, “It was such an unbelievable figure that I thought a zero was missing.” He continued, “Existing shareholders judged that it was better to extend the company’s lifespan by lowering the valuation than to let the portfolio company go out of business.”
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