(Bloomberg) -- Waterdrop Inc. has raised about $200 million to bankroll its expansion in healthcare crowdfunding, according to people familiar with the matter.

The insurance tech startup, backed by Tencent Holdings Ltd., raised the money at a valuation of around $2 billion, the people said, asking not to be identified because the matter is private.

A representative for Waterdrop declined to comment.

One of Waterdrop’s main businesses, Water Mutual, operates like a collective: people chip in small amounts of money to help others diagnosed with critical illnesses and in return receive payouts when they themselves are in need. The company said last year it takes a commission of 8%.

The Beijing-based company is also said to be mulling an initial public offering, other people familiar with the matter said last month. The four-year-old firm plans to include its key business units -- Waterdrop Mutual, as well as Waterdrop Insurance Mall and Waterdrop Crowdfunding -- in the proposed listing.

A share sale could help Waterdrop raise funds to fend off competition from Ant Group in the Chinese healthcare space. There’s growing demand for quality medical services in China, whose population is rapidly graying and grappling with soaring rates of critical illnesses.

Waterdrop is working with Bank of America Corp. and Goldman Sachs Group Inc. on the IPO. The U.S. is among potential listing venues but no final decisions have been made.

Waterdrop, which works with 28 insurance companies including some of China’s biggest names, has more than 250 million users, according to its website. Its backers include Boyu Capital, Meituan Dianping and IDG Capital Partners, and it raised about 1 billion yuan ($143 million) in a series C funding round in June 2019.

Ant’s Xiang Hu Bao, which has around 106 million users, is one of Water Mutual’s direct competitors.

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