MaHui Entrepreneur | Yuanbao Inc. Founder Fang Rui: The IPO Is Just One Thing Checked Off the List

On April 30 Beijing time, MaHui member Yuanbao Inc. officially listed on Nasdaq under the ticker symbol "YB."

On June 5, Yuanbao released its first post-IPO quarterly earnings report, delivering results that far exceeded market expectations. In Q1 2025, the company achieved substantial growth in both revenue and net profit, with total revenue reaching RMB 970 million, up 43.8% year-over-year, and net profit of RMB 295 million, up 122.1% year-over-year.

Founded in 2019, Yuanbao has, in just five years, leveraged Mobile Internet's efficient reach to capture opportunities in the inclusive health insurance market — a growing segment — and actively expanded into broader markets. By partnering with insurers to customize and distribute life insurance products, and by providing after-sales services such as claims assistance, Yuanbao has carved out new growth areas in what were traditionally "low-density" zones of insurance service.

According to the latest Frost & Sullivan data in its prospectus, measured by first-year premium, Yuanbao has become the second-largest distributor in China's life insurance market. Excluding dependent insurance distributors incubated by major internet platforms, Yuanbao ranks as the largest independent insurance distributor in China's life insurance market.

Yuanbao's rapid rise and steady growth align with the broader trend of increasing recognition of commercial health insurance's value — driven by population aging, rising medical expenditures, and mounting pressure on public health insurance funds. At the same time, China's insurance penetration and density still lag far behind developed countries, suggesting that commercial insurance is on the verge of explosive growth.

Unlike traditional insurance service models, Yuanbao has introduced AI algorithms into insurance distribution and claims processing, transforming insurance product sales from a human-resource-driven activity to one powered by AI technology. This has improved the experience and efficiency of insurance sales and after-sales services in China. According to its prospectus, Yuanbao has built an efficient consumer lifecycle service engine.

As of the end of Q1 2025, Yuanbao's model library had expanded to 4,700 models and 5,100 features — adding 600 models and 1,000 features year-over-year. Based on this model network, Yuanbao can operate numerous scenarios ranging from initial user targeting and acquisition to sales conversion and after-sales service, continuously optimizing the service path for each potential customer.

Ahead of its IPO, Yuanbao Group founder and CEO Rui Fang spoke with Source Code Capital, sharing his reflections on entrepreneurship. In the conversation, "value" was the word he mentioned most frequently. Beyond commercial considerations, his commitment to the insurance industry carries genuine social concern.

Fang previously served as Vice President of NetEase and head of the group's technology department, during which he founded NetEase E-commerce and NetEase Pay and served as their CEO. Before entering the insurance industry, he had spent nearly two decades in the internet sector. With a technical background but exceptional business acumen, his previous experience made him keenly aware of the core value that big data and AI algorithm technology bring to internet businesses overall. He believes that digitalization and inclusive transformation are irreversible trends. To enable broader populations to access the inclusive value of insurance, data-driven approaches and algorithmic models are both indispensable.

Source Code Capital led Yuanbao's Series C round and has since provided over 100 instances of post-investment support, helping Yuanbao recruit multiple key talents.

Xingshi Wang, Managing Partner at Source Code Capital, strongly recognizes the supplementary role of commercial insurance in social security and is optimistic about the inclusive transformation enabled by new technologies. Wang noted that Fang and Yuanbao exemplify a team that solves problems as they arise — though the entrepreneurial journey has had its twists, there is always a path forward.

In assessing his own entrepreneurship, Fang cites vision, luck, and a team without weak links. He says the IPO merely completes one task — "not even a comma, at most a milestone."

Entrepreneurship Is a Joyful Endeavor

Source Code Capital: You spent 17 years as a professional manager at companies like NetEase, and you've now been an entrepreneur for nearly five years. What prompted you to start your own company?

Rui Fang: Personally, I've always had a strong desire to build a startup. At NetEase, besides overseeing the group's technology operations, I was also deeply involved in the e-commerce division. Around 2011, our e-commerce business entered a period of major expansion — the team and operations grew rapidly and achieved very impressive results. So I never quite made the decision to leave. By 2019, I felt I could no longer miss this window. The Mobile Internet era had passed, but there were still opportunities in the industry.

Source Code Capital: Why did you choose insurance as your赛道?

Rui Fang: We observed that China's insurance industry was already massive — RMB 4 trillion at the time, now RMB 5.7 trillion. Most importantly, we believed that insurance, particularly health insurance, delivers tremendous value to ordinary people. As China's population ages, healthcare has become an increasingly central concern for many. So the insurance industry not only enjoys strong state support but also serves as a cornerstone of social stability. From this perspective, we saw a broad赛道 with significant social importance — and a real industry opportunity.

Source Code Capital: Transitioning from professional manager to entrepreneur — how did you and your team adapt?

Rui Fang: Our team atmosphere is genuinely excellent. Most core employees joined me right after graduation to work on internal incubation projects at NetEase. Everyone has a strong entrepreneurial spirit, works hard, and is very united. So while the entrepreneurial journey has had its challenges, we've found it deeply meaningful. Early in the startup, I told a friend that I never expected entrepreneurship to be such a joyful experience — had I known, I might have made the leap sooner.

Technology Breakthroughs in Insurance

Source Code Capital: Yuanbao's prospectus emphasizes many AI and data advantages. How did you come to approach insurance through AI or large models?

Rui Fang: We recognized very early that the AI era had arrived, just as we had sensed the Mobile Internet era early on.

One memory stands out. Around 2010, fifteen years ago, I participated in a media interview on technology. At the end, the journalist posed a challenging question: What would be the next explosion point for the internet? I said Mobile Internet.

At that time, we quickly seized the Mobile Internet opportunity. In our e-commerce business, we went all-in on mobile, with many products abandoning the web entirely and launching only as mobile apps — relatively uncommon back then, and a strategy that proved correct.

By 2019, when we started Yuanbao, we were firmly convinced: the internet without artificial intelligence cannot be called true internet. Whether distributing information or pushing products, without a powerful AI engine to acquire target users and make precise recommendations, you hit a ceiling. So in building Yuanbao, our business and management were entirely data- and algorithm-driven.

Source Code Capital: Were you already researching relevant algorithms at that point?

Rui Fang: From day one, we had our own AI algorithm engineers and big data team as standard, core components. At the earliest stages of GPT, we had already incorporated related technologies into our underlying models — so I'd say our AI awareness was quite advanced.

When ChatGPT 3.5 emerged, the entire industry and world were shaken. In fact, we had been applying these frontier technologies since 2019. Our smooth development and improving business stemmed from collectively making the right choices — and we were fortunate.

Source Code Capital: Yuanbao's direction of using technology to leverage the industry seems quite clear.

Rui Fang: Exactly. From this perspective, we very clearly recognized the core value that big data and AI algorithm technology bring to internet businesses overall. Without this capability, trying to do internet business in traditional ways and hoping to innovate a business model that others don't have — that's extremely difficult.

Because after entering the mobile era, China's top traffic platforms had already stabilized. The key question became how to extract value for your product from limited traffic. This requires several capabilities: first, a data-driven mindset; second, a strong AI algorithm team to build models that ensure higher efficiency and conversion rates than competitors in serving users. And in understanding user needs, you need your own models. If you rely on人海战术 or other traditional methods, you have no advantage and create no value.

So our insurance business may seem unremarkable on the surface, but it requires a very powerful system underneath — continuously expanding at the intersection of red-ocean traffic and blue-ocean value, not simply placing ads.

Source Code Capital: So do you feel that, at least at this stage, AI's influence on insurance will grow increasingly significant, the technology gap between startups and large companies is narrowing, and what might the landscape look like in 5 or 10 years?

Rui Fang: I actually don't think AI will change the ultimate outcome of the insurance industry, because the sector is so vast. For life insurance, there's also asset management and investment理财 — helping users preserve and grow wealth, which is a massive undertaking. For health insurance, it mainly involves sales and claims service. On the sales side, the proportion of Chinese insurance sold online remains very low; the vast majority still goes through traditional brokers and agents. As the agent channel undergoes natural迭代, AI-driven insurance services are building a second growth curve. Certain inefficiencies in traditional sales models may exit the historical stage during this upgrade and transformation, or become quite different from the past. Though there's still a journey ahead, because ultimately all technology serves to boost productivity, lower living costs, make life more enjoyable, and free up more time for entertainment or pursuing one's passions.

From this angle, AI will positively impact insurance sales, especially for service-heavy commercial health insurance, significantly improving user experience — both in the sales process and in addressing post-purchase questions, as well as making claims service more convenient and efficient. We treat every claims case as a stress test of AI's value. This value is definite. For service-oriented insurance products, it's also an important way to improve efficiency and reduce costs.

Entrepreneurship: Vision, Luck, and Being a Hexagonal Warrior

Source Code Capital: To some extent, entrepreneurship requires catching every trend — both business intuition and technological commitment.

Rui Fang: Those who understand technology first see the future. This applies not just to entrepreneurship. At NetEase, when our projects stood out, people asked what our secret was. AI, big data — these technologies were core and crucial. But conversely, competition in China's internet space is extremely fierce and market-driven. Relying on "one trick that works everywhere" gives you only localized advantages; gaining comprehensive competitive advantage is very difficult, with slim chances. You need holistic, systematic capabilities to outcompete rivals.

Our employees are high-quality, capable, and well-credentialed — any company might say that, and others are strong too, just with different approaches. What we consider a strong team involves not just technology but also excellence across the board. That means not just strong tech, but strong product, operations, marketing, and brand teams — only then can you truly succeed. A company with any weak link will struggle to succeed today.

Source Code Capital: How do you find excellent talent and forge them into hexagonal warriors?

Rui Fang: I realized early on that hiring is difficult at the startup stage. From day one, we were a relatively complete team with people we knew well across functions, especially some exceptionally capable former colleagues in core areas who played a critical role in our business.

In subsequent team building and recruiting, two lessons stood out: First, don't just look at backgrounds to find excellent people — there's a method to it. Find people with self-awareness and a drive to succeed. Excellent people make management relatively easier. It's a simple truth. Second, core people in every function need strong comprehensive capabilities. In today's intense competitive environment, you absolutely cannot rely on technology alone. Running a commercial company is a system — every function, link, and detail must be solid to build a competitive company. Entrepreneurship requires comprehensive understanding and preparation.

Source Code Capital: Were there challenges during the company's development?

Rui Fang: Of course! In 2020, when expanding the team, hiring was extremely challenging because we faced competition not just from internet giants but also from the education sector's expansion. The entire recruiting market experienced a talent虹吸 effect. Almost every candidate we liked had offers from major tech companies. For a fledgling startup, the pressure and challenges were indeed significant.

IPO Is Not a Period

Source Code Capital: How did you connect with Source Code Capital?

Rui Fang: Fundraising was quite stressful at the time. At Source Code Capital, I first reached out to Xingshi, then connected with Yi (Yi Cao). In subsequent conversations, I found both Xingshi and Yi deeply moving. How to put it? At that time, though there were many financing options initially, uncertainty lingered until final confirmation. By 2021, market noise had increased, capital markets had cooled, and everyone was under pressure for a period.

Source Code Capital: The impact came fast.

Rui Fang: Yes, so there was considerable pressure at one point. But in these past two years, investors have come to see us as a very mature entrepreneurial team, so they've been very trusting. The overall process has been quite pleasant. As one investor put it, their favorite thing was attending Yuanbao's board meetings — they just needed to applaud throughout, because the data always seemed better than they expected.

Source Code Capital: Yuanbao managed its financing rhythm very well, completing three rounds in one year.

Rui Fang: It mainly depends on your philosophy, because financing means dilution. Some people are reluctant to raise funds, preferring to wait until the company is more valuable. But we were willing to fundraise and actively pushed it forward.

Source Code Capital: There are hundreds or thousands of companies in the online insurance channel. Looking back at Yuanbao's journey, what阶段性 insights enabled you to consistently outperform and reach IPO?

Rui Fang: I believe health insurance has opportunity in the online market largely because it's quite different from traditional insurance — it's a product with very strong service attributes. The internet industry can be called tech or service. Whether doing e-commerce, information services, or gaming, it's all a form of service.

So I think first, we need user-centric thinking, truly serving users well.

Second, we always treat technology as the primary productive force of the company. This is even more pronounced in the internet environment. So improving service capabilities and creating social value through technology — this has been our firm, consistent belief. As for surpassing competitors, it still depends on comprehensive business capabilities and core technology to build strategic advantages and barriers.

Source Code Capital: Yuanbao is IPOing very quickly. When you ring the bell, will you feel this marks a阶段性 achievement?

Rui Fang: That's an excellent question — I'll answer from two perspectives, external and internal. Capital markets currently face great uncertainty. So who dares say IPO is a period? Right now it's not even a comma, at most a milestone. It merely secures better access to capital markets and more possibilities. For the industry, in China's RMB 5.7 trillion insurance民生工程, we have only just laid the first "intelligent brick."

Source Code Capital: And the internal answer?

Rui Fang: Internally, the IPO just completes one thing.