InsuranceDekho bags $60M; second fundraise in 8 months to beef up M&A strategy
Over the last eight months, InsuranceDekho has embarked on its “buying” strategy with a capital war chest of over $210 million to expand its reach across Tier II and beyond regions across India.
Insurance distribution platform has raised $60 million in its ongoing Series B funding round as the ‘soonicorn' startup looks to double down on acquiring new businesses to expand its regional capability and tap new insurance categories.
Without divulging concrete numbers, Co-founder and CEO Ankit Agrawal told YourStory that the latest round, a mix of equity and debt, was raised at “soonicorn valuation”, and was 50% higher than the last round.
A soonicorn is a startup that is expected to reach the $1-billion valuation mark in the near future.
Japanese giant Mitsubishi UFJ Financial Group, Inc (MUFG), insurer BNP Paribas Cardif (who invested via its insurtech fund managed by European investment major Eurazeo), Beams Fintech Fund, and Yogesh Mahansaria Family Office joined the captable with the new round.
Interestingly, this would be Eurazeo’s first bet in the region.
“We are thrilled to make InsuranceDekho our first investment in India with the insurer BNP Paribas Cardif. After our investments in China, Indonesia and Singapore, we’re extending our footprint with the ambition to become a leading player in Asia,” said Matthieu Baret, Managing Partner–Venture at Eurazeo.
Existing backers—TVS Capital, Goldman Sachs Asset Management and Avataar Ventures—also invested in the Gurugram-based startup.
The latest fundraise comes eight months after the company secured $150 million (Series A), which was one of the largest funding deals closed by an insurtech firm in South Asia.
This was followed by the firm making two strategic acquisitions. It acquihired IRSS to strengthen its offline agent network in the western part of the county and took over Verak to build a stronger presence in the SME insurance vertical.
M&A focus
Over the last eight months, InsuranceDekho has embarked on its “buying” strategy with a capital war chest of over $210 million to expand its reach across Tier II and beyond regions across India.
“We are looking at deals as we speak. We look at these acquisitions from multiple avenues, including as an addition to our tech capability, a new product or geography,” said Agrawal during the interview with YourStory.
For instance, Gujarat-based distributor IRSS brought in a network of 12,000 freelance agents who work at sourcing financial products, into InsuranceDekho’s business. Meanwhile, Sequoia- and LightSpeed-backed Verak has a stronghold in micro-business insurance schemes and SME insurance vertical—the latest focus for InsuranceDekho.
While operating on a hybrid model, InsuranceDekho will continue to focus on building an offline agent network to sell insurance and deepen its presence beyond metro regions, which are the source of over 90% of its policy premiums.
Many investors onboarded the company looking at its grand plans to sell insurance products in Tier II and III cities.
“InsuranceDekho’s tech-driven last-mile distribution model perfectly aligns with our vision of advancing insurance outreach in India,” said Shashank Joshi, Deputy CEO of MUFG Bank, India.
The startup targets onboarding two lakh agent partners on its platform by March 2024, and claims to be on track to achieve overall premiums worth Rs 3,600 crore this fiscal.
Doubling down on non-motor, reinsurance
InsuranceDekho is also planning to increase the share of non-motor insurance in its revenue mix while also entering the reinsurance business.
At present, 75% of its revenue comes from selling motor insurance, followed by other segments like fire, marine, health, travel, and pet. It has tied up with 46 large insurance companies, including LIC, which sell over 410 insurance products via the platform.
“We are extensively focused on building a non-motor book. Over the next three years, you will see a lot of business coming from that,” the co-founder added.
The insurtech firm has recently been focusing on fire and shop insurance, workmen’s compensation, transit insurance, and group health insurance for SMEs.
Beyond regular competition from peers like , , , InsuranceDekho is also up against the likes of and (holding corporate agent licenses), which have been cross-selling insurance, particularly motor, on their apps.
Last year, IRDAI allowed corporate agents to tie up with nine insurers (from three insurers previously), allowing the aforementioned payment fintech companies to offer a wider choice of insurance to their large user base.
“It (competition) will keep us on our toes. It also gives a validation that it (motor insurance) is a big area, which is why the likes of Paytm and PhonePe have attributed to it,” said Agrawal as he also dismissed the company’s plan to get into underwriting insurance and selling the same in a D2C model like its peers, Acko and Navi.
“We will always focus on distribution,” he asserted.
In terms of financials, InsuranceDekho managed to reduce its losses by 29% to Rs 52 crore in FY23 while doubling its operating income to Rs 96.5 crore. It aims to turn profitable in the current financial year.
“We have always been a very frugal company and made sure that we invest in the right things at the right time. We have never overspent, that’s why our unit economics are strong, and also why we were able to raise the new round so quickly,” the co-founder explained.
Further, Rajat Sood, Managing Director, Goldman Sachs Asset Management, said: “InsuranceDekho continues to help improve insurance penetration in India by bringing value-added solutions to the insurance market using its technology platform and capitalising on its expanding distribution partner network.”
(The story was updated to rectify founder's name)
Edited by Kanishk Singh