DOMESTIC online insurance technology firm Waterdrop Inc. is receiving pushback from domestic regulators on its planned U.S. initial public offering (IPO) as its business model is seen as risky, four people familiar with the situation said.

Waterdrop, which is backed by Internet giant Tencent Holdings, has been working with financial advisers since mid last year on going public and had already made a confidential filing for the float, said three of the people.

The China Banking and Insurance Regulatory Commission (CBIRC), however, has questioned the company’s business risks, which has slowed down the IPO process, they said. The CBIRC even told founder Shen Peng this month that it would not suggest that Waterdrop go public at this point, said one of the sources.

Waterdrop distributes insurance policies online and provides illness crowd-funding. It was not immediately clear what exactly the CBIRC felt was risky in its business.

Waterdrop denied in a statement that Chinese regulators were opposed to its capital markets plan, adding that its senior managers are in regular communication with regulators.

The CBIRC did not immediately respond to a request for comment yesterday. The sources declined to comment as the information is private.

The scrutiny on Waterdrop and its IPO comes as financial regulators have stepped up supervision over the country’s financial technology companies after the halting of Ant Group’s US$37 billion IPO in November due to financial risks.

Waterdrop had aimed to go public by end-2020 but is now looking to list in the second quarter, according to the sources. It was not immediately known how much Waterdrop is seeking to raise or at what valuation.

The firm last month shut down its online health care mutual aid platform, which provided users with a shared basic health plan covering various types of critical illnesses, amid regulatory headwinds. (SD-Agencies)