Acko — a startup out of India that has taken on the country’s antiquated insurance industry with a digital-first product for drivers and others in transportation-related scenarios (for example, cancelled ticket insurance) — has raised more funding as it passes 20 million customers on its books. The company has closed a Series C of $65 million from a list of investors that includes not just the co-founder and former CEO of Flipkart, but also its arch-rival, Amazon — speaking to the opportunity in the market as a number of players zero in on services
Binny Bansal, who had been the CEO until November of the e-commerce giant, and Amazon are joined in the round by another strategic investor, Intact Ventures Inc., the corporate venture arm of Canada’s largest property and casualty insurer; along with RPS Ventures (the VC led by Kabir Misra, ex-managing partner at Softbank), Accel, SAIF and TechPro Ventures. Amazon had also led the company’s previous round of funding, a $12 million investment, last year.
Acko now has raised $107 million, and while it is not discussing valuation, a reliable source close to the company said that it is now in the region of $300 million.
Varun Dua, the CEO and founder, had spent 10 years in the insurance industry before founding Acko, most recently building a site aggregating different insurer’s quotes called Coverfox. But when it comes to the companies building the products themselves, he believes that there has been very little innovation in the past 30 years.
Acko has built its business on two fronts up to now. A direct to consumer offering sells automotive insurance both for people insuring for themselves, a business that has now insured some 200,000 cars. It also works with third parties to provide what we described to me as “microinsurance” products around other companies’ services. For example, ticket cancellation insurance, rider protection, and driver protection for about 15 companies at the moment, including Ola, redBus, Zomato, UrbanClap and Amazon.
Amazon may appear a little out of left field in the at list, but Dua said that it’s because of trends specific to the Indian market that the two work together. First, it offers vehicle insurance alongside cars that are sold on the Amazon platform. But beyond that there is the opportunity to build services for what he calls “ecosystem” players in the market, those who provide a wide array of different services, and links to services, to consumers, leveraging their data on consumers to help shape those offers.
“We continue to be impressed by Acko’s focus on data-led innovations in the insurance sector that are solving for important customer needs in this sector. We are always excited to work with companies like Acko that are led by missionary founders and management teams and we remain committed to investing in technology-backed innovations that address real customer problems,” said Amit Agarwal, SVP and Country Head, Amazon India, in a statement on the investment.
While Bansal is recently no longer in an executive role at Flipkart, it’s notable that he is getting involved with Acko at a time when Dua says he would like to be working more with the company, which is also developing an array of services beyond the basic selling of goods to service India’s rapidly growing base on online consumers.
“Technology-led insurance is expected to play a significant role in growth of the underpenetrated insurance sector in India,” said Bansal. “Acko is the pioneer of digital-native insurance and I am delighted to partner in its exciting growth journey.”
Just as Acko partners with companies to provide its insurance, it’s also working with an increasing array of insurers who are looking for better ways to tap consumers in the market.
“We are thrilled to support Acko in its mission to become the leading digital insurer in India. In addition to their innovative direct-to-consumer strategy, Varun and his team have taken a creative approach by developing impactful distribution partnerships that allow millions of customers to protect assets that are meaningful to them,” said Karim Hirji, Senior Vice-President of Intact Ventures. “We are excited to offer our expertise and partner with a company that shares our vision of creating simple and transparent new-age customer centric insurance products.”
Earlier today, I posted a story about Drivezy and how it was raising a lot of money to double down on building its car-sharing network out of India. One of the gaps in the market for it is that only seven percent of Indians actually own vehicles. Interestingly, that’s a number that Dua thinks is a great start.
“Seven percent is still very large in India given the size of the population,” he said. “It’s the fourth largest auto market in the world, and the auto insurance space is likely to be worth $10 billion usd in the next several years. That’s big size for a company like us.”