The rise of insurance tech: Digit Insurance raises record $44 M in second round of funding
Bengaluru-based insurtech startup Digit Insurance on Wednesday announced that it has raised $44 million in a second round of funding.
According to the statement released by the company, Canadian billionaire Prem Watsa’s Fairfax Holdings has invested the second round of capital ($45 million) in Digit Infoworks, the parent company for Digit Insurance, of which a significant part of the investment ($44 million) is given to Digit Insurance.
Toronto-headquartered life insurance major Fairfax had close to a 45-percent stake in Digit Insurance, as of May this year.
This investment brings Digit Insurance’s total funding to $94 million.
Digit Insurance plans to invest the funds in technology to drive its mission of making insurance simple. A significant use of fund will also be invested in launching new lines of products and expansion of distribution network across the country, the firm said.
In a press statement, Kamesh Goyal, Founder and Chairman, Digit Insurance, said,
“Our investors have shown confidence in our mission of making insurance simple, and this round of funding will further help us in doing that. Our long-term investment is directed towards bringing in technology that can automate and fasten processes and resolve customer pain points.”
Kamesh incorporated Digit Insurance in 2016, but the firm got licences for its planned products and started operations only in November 2017.
It has a range of products across categories of motor, travel and jewellery, and has also partnered with ecommerce players like Paytm and Amazon to provide insurances of electronics and handsets.
In the coming months, Digit Insurance plans to launch categories such as two-wheeler, international travel, health, and home insurance.
Insurance tech heating up
Just last year, Acko General Insurance had raised $30 million, in what was touted to be one of the largest seed rounds for the Indian startup ecosystem. The funds were raised from HNIs and venture capital firms Accel and SAIF Partners. Last month, Coverfox raised $22 million as part of its Series C funding, led by IFC, a sister organisation of the World Bank Group, as well as Transamerica and other existing investors.
In the last week of June this year, ETechAces Marketing & Consulting Pvt Ltd, which parents not only the insurance policy comparison marketplace, but also its lending counterpart PaisaBazaar.com said it had raised over $200 million in a Series F round led by SoftBank Vision Fund.
This made PolicyBazaar the first insurance platform to make it to the Indian Unicorn club.
But competition is also heating up from established players like Paytm which announced its entry in the insurance space, by setting up Paytm Life Insurance Corporation Ltd and Paytm General Insurance Corporation Ltd in February this year.
In an interview with YourStory, Yashish Dahiya, the Co-founder and CEO of PolicyBazaar said that the reason for big investments to pour in Insurance technology is the large profit pool the sector holds along with the consumer’s maturity to technology. He added,
“Consumers are now starting to engage, which makes this the right time for investors to place bets on a digital transformation. Especially in an industry that was largely untouched by digitisation. PolicyBazaar’s success has imparted the confidence that a change is happening.”