Zhibao closes $154.7 million Bitcoin-funded PIPE financing

Zhibao Technology closed a $154.7 million private placement funded entirely in Bitcoin, issuing 442 million units at 35 cents each to a syndicate of non-U.S. investors.

"The successful closing of this $154.7 million investment strengthens our financial foundation and significantly accelerates our future growth potential," said Botao Ma, director at Zhibao.

Each unit comprises one Class A ordinary share and a two-year warrant exercisable at 35 cents. The company delivered 395.7 million units at closing, with 46.3 million more due after shareholder approval. Investors paid 2,380 Bitcoins, valued at $65,000 each as of July 30.

The capital injection gives the Shanghai-based InsurTech company runway to deepen scenario integrations and expand AI-driven capabilities, while the pending shareholder vote on authorized share capital adds a governance hurdle. Zhibao must file a Form F-1 registration statement with the SEC within 45 days of the July 31 effective date.

Bitcoin at $65,000 funds the deal

The transaction, struck under Regulation S of the Securities Act of 1933, was amended Aug. 17 from the original July 31 agreement to split delivery into two tranches. The first tranche of 395.7 million units was delivered at closing, with the remaining 46.3 million units to follow once shareholders approve an increase in authorized share capital, with no additional consideration required from investors.

Zhibao, which pioneered China's 2B2C digital embedded insurance model, launched the country's first digital insurance brokerage platform in 2020, powered by its proprietary Platform-as-a-Service. The company has built more than 40 digital insurance solutions spanning travel, sports, logistics, utilities and e-commerce, using big data and AI to iterate on products.

The Bitcoin-funded structure reflects the investors' expertise in cryptocurrency markets and Web3 infrastructure, Ma said, adding that the combined capabilities should extend Zhibao's lead in the InsurTech space. The company's operating entities, known as Zhibao China Group, serve individuals and small and medium-sized enterprises through the embedded-insurance model, a segment where it competes with larger Chinese insurers and fintech platforms.

Dilution risk at 35 cents a share

The financing arrives as Zhibao's shares trade at a market capitalization of about $7.5 million, with TipRanks' AI analyst rating the stock Neutral on weak financial performance — a sharp revenue decline, a return to sizable losses and persistent negative operating cash flow. The 35-cent unit price, well below recent trading levels, could dilute existing holders, while the pending shareholder vote determines whether the full 442 million units are issued.

The company's reliance on crypto-based financing and the importance of the upcoming governance approval for completing the transaction show the balance between fresh capital and shareholder dilution. If shareholders reject the authorized capital increase, Zhibao would keep the $154.7 million in Bitcoin but issue only the first tranche of units, leaving the warrants tied to the remaining 46.3 million units unexercised. The registration statement covering resale of the shares, warrant shares and certain management shares is due within 45 days of the July 31 effective date, a timeline that will test the company's disclosure readiness as it integrates a crypto-denominated balance sheet.

This article is for informational purposes only and does not constitute investment advice.