(Yicai Global) Feb. 13 -- Chinese online insurance platform Huize Holding has raised USD55.1 million an initial public offering on the Nasdaq, becoming the first listed company of its kind in the process.

The Shenzhen-based firm issued 5.25 million American depositary shares at USD10.5 apiece yesterday, at the middle of its USD9.4 to USD11.4 price range. The stock slumped on its opening day, however, winding up 4.76 percent lower at USD10 for a market cap of USD513 million.

Huize plans to use the funds raised to invest in technology and Big Data with which it can improve customer acquisition efficiency and better manage risk, it said in its prospectus. It will also spend some of the cash on product design.

Founded in Shenzhen in 2006, Huize was one of the first firms in China to land an online insurance permit. It had 50 million users as of the end of September, and made CNY735.1 million (USD105 million) from premiums over the first three quarters of 2019, more than doubling the figure from the year-ago period. It expects it made CNY110 million in profit for the full year.

China has the world's second-largest insurance market behind the United States, and with the rise of the internet economy, the web has become one of the fastest-growing sales channels in China. The division of labor between insurers and their sales platforms has become increasingly apparent as of late, with third-party channels surpassing insurers own websites as the main source of premium income in the e-insurance sector, according to a report published by iResearch in June.

Huize is not the only major player though, and is facing increasing competition from the likes of Alibaba Group Holding and Tencent Holdings, two of the biggest names in China's digital environment. The two giants sell their insurance via their financial apps, which gives them access to huge amounts of daily traffic.

Editors: Dou Shicong, James Boynton