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After more than a decade of firm eyes on mergers and acquisition opportunities in the South Asian nation, Indian insurance platform InsuranceDekho has raised $150 million in Series A funding, where the market downturn has seen most startups.
Goldman Sachs Asset Management and TVS Capital led the funding round for 13-year-old startup CRIA, they said. The round included some debt — about $40 million — but executives said more than half of the raise was against equity.
The Series A funding will value the Gurugram-headquartered startup in unicorn group automobile marketplace group CarDekho at between $475 million and $500 million, a person familiar with the matter said. In an interview with TechCrunch, InsuranceDekho executives declined to comment on the startup’s valuation, but said they were in the “Sonicorn” circle. Investcorp, Avatar Ventures and Leapfrog Investments also participated in the round.
InsuranceDekho operates most of the insurance providers in the country and has direct integrations with around four dozen organizations offering around 400 insurance products. Auto coverage startups are the most popular insurance product they sell these days, he said.
Currently, India’s insurance coverage is less than 5 percent of GDP, compared to 12 percent in the U.S. An average Indian earns $2,100 a year, according to the World Bank. Rating agency ICRA estimated that Indians were spending less than $50 million in 2017 on those insurance products.
InsuranceDekho co-founder and CEO Ankit Agrawal said the startup has a presence in 98 percent of all zip codes in the country, giving it the opportunity to go deeper as the market matures. Although Dekho Insurance is not a household name in urban Indian cities, Agrawal said the startup sells more than 80% of all Indian cities. In the year By the end of FY23, Dekho Insurance plans to pay over $240 million in total premiums, he said.
“We need to go beyond the cities when it comes to insurance coverage in the country. We are expanding our reach to realize our goal of democratizing insurance for the masses and will continue to strengthen our technology-based solutions and advisors so that by the end of the year they will be able to serve every village and region of India. Agrawal said
InsuranceDekho currently relies on over 80,000 gig-economy workers called “agents” to educate the market and sell insurance covers. Agrawal says that greater India is currently not ready to download an app and buy an insurance product. He said they need an understanding of the benefits and a body to ask questions of. The startup plans to more than double its non-employee agent workforce by the end of the year.
Several firms, including Digit, the soon-to-be-public, listed policy bazaar firm and Amazon-backed Aco, which is advanced to raise a round, as well as Paytm and PhonePe sell insurance products in India. Agrawal argued that the arrival of fintech giants in the sector is indicative of the market’s size and opportunity.
The key to increasing the adoption of insurance products in India is to reach the middle and lower middle income segments, said Praveen Sridharan, Partner, TV Capital, in a statement.
“Insurance Deco, with its agency model and digital DNA, provides a powerful means to expand this penetration. We are confident in the InsuranceDekho model. Of course, we always bring back founders who can deliver alpha and were impressed by Ankit and his team based on their execution capabilities, operational excellence and advanced technology skills. We are pleased to be a partner in their journey to enable insurance products to reach 600,000 Indian villages.
InsuranceDekho plans to deploy the new funds to acquire smaller firms that can expand its capabilities or provide a wider geographic advantage, InsuranceDekho’s Agrawal said.
The startup’s funding comes at a time when investors are growing wary of market conditions as many other companies in the country struggle to raise new financing.
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