Automobile marketplace unicorn CarDekho’s insurance arm InsuranceDekho, on Wednesday, said it has raised $60 million in a mix of debt and equity at a valuation of over $600 million in its Series B funding, nearly eight months after raising $150 million in its previous funding round.
Japan’s Mitsubishi UFJ Financial Group (MUFG), BNP Paribas Cardif, through its insurtech fund managed by European investment major Eurazeo, India-focused Beams Fintech Fund and Yogesh Mahansaria Family Office came on board as new investors in the latest round.
InsuranceDekho’s existing investors TVS Capital, Goldman Sachs Asset Management and Avataar Ventures, also invested in the round, the company said.
In an interview with DealStreetAsia, InsuranceDekho’s CEO and co-founder Ankit Agrawal said the majority of the $60 million round is equity but did not disclose exact numbers.
Started as an automobile aggregator by CarDekho in 2019, InsuranceDekho allows customers to compare and buy motor and health insurance. The company has since expanded into other forms of insurance such as life, term, and retirement plans.
Agrawal said the firm is seeing the highest demand for health insurance and insurance for SMEs (small and medium business enterprises).
From the new funding, the company plans to boost its marketing activities, expand its distribution presence in the Indian hinterland, scale up its tech platform and explore inorganic growth opportunities.
Agrawal said the company does not plan to expand outside India right now.
For the year ended March 31, 2023, the company’s revenue, contributed by brokerage and commissions, rose to Rs 96.4 crore from Rs. 47.9 crore. The company’s losses widened by 28.6% to Rs 51.6 crore.
It claims to be on track to achieve Rs. 3,600 crores premium this financial year and is targeting to have 2,00,000 agent partners on its platform by March 2024. Currently, the firm is present in over 1,500 regions, covering 98% of pin codes across the country. It gets over 90% of its premiums from tier 2 regions and beyond.
Agrawal said the company plans to break even on a full-year basis in 2024 and have an IPO in the next 2-3 years.
The firm has raised more than $200 million in 2023 so far, including the latest funding.
Fundraising by Indian startups has been on a downward trajectory since May this year as an extended funding winter coupled with global market volatility and geopolitical conditions have adversely affected economic activity in the country. However, fundraising bounced back in September after a lull of almost three months, with startups amassing nearly $1.2 billion across 74 private equity and venture capital transactions, according to proprietary data compiled by DealStreetAsia.
In 2020, the insurtech startup received $20 million in funding from its parent company GirnarSoft, which it said it would use for branding and strengthening its tech, product, and sales teams.
The insurance sector in India, served by the likes of InsuranceDekho and its competitors Acko, LIC, and PolicyBazaar, has seen a sharp growth in recent times as the pandemic made more people realise the need for financial protection and insurance coverage. The past couple of years have seen a rise in funding for insurance startups in India, with participation from a host of global investors.
“We have spent a lot of time in the insurtech space now to identify the challenges in the manufacturing and distribution of insurance in India. The insurance space in India is marred with low penetration, lack of trust, mis-selling, limited access and affordability. In the diverse and growing Indian insurance market, where protection and financial security are paramount, the potential for growth in this sector is immense,” Sagar Agarvwal, Managing Partner, Beams Fintech Fund said.
In July this year, insurtech startup RenewBuy raised $40 million (Rs 328 crore) in an ongoing Series D funding round from Japanese life insurance firm Dai-ichi Life Holdings.
In the same month, Bandhan signed an agreement to acquire the entire stake of Aegon and Bennett, Coleman & Co. Ltd (BCCL) in Aegon Life Insurance, to foray into the insurance business.
In 2021, Loop raised $25 million from General Catalyst and Elevation Capital (formerly Saif Partners), while the insurance arm of Aditya Birla Group, Aditya Birla Health Insurance (ABHI), also raised $83 million from a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA).
That year also saw the biggest IPO in the history of the Indian markets—the Life Insurance Corporation of India (LIC), which debuted at an IPO price of Rs 949 per share in May, valuing it at around Rs 5.7 lakh crore. The company’s stock is now trading at Rs 637 per share.