Insurance tech startup Digit Insurance has announced raising $200 Mn from Sequoia Capital India, IIFL Alternate Asset Managers and other investors, in its latest funding round. Existing investor Faering Capital has also participated in the round, which is subject to IRDAI approval, the company said.
The round brings Digit Insurance’s total funding till date to up to $442M, valuing it at $3.5 Bn. Digit entered the Indian startup unicorn club earlier this year with a after raising INR 135 Cr ($18 Mn) at a valuation of $1.9 Bn. The company counts TVS Capital Funds, A91 Partners, Indian men’s cricket team captain Virat Kohli, Anushka Sharma as investors.
The Bengaluru-based company is a tech-driven general insurance company that offers customised policies on health, auto, travel, smartphones, commercial properties such as stores and holiday homes. It expanded its business during the pandemic by offering new products like fixed benefit cover for Covid-19 under Insurance Regulatory and Development Authority’s (IRDAI) sandbox initiative.
One of the its key products in the past year has been the Digit Group Illness Insurance product, which offered protection against Covid-19 and seven vector-borne diseases like dengue, malaria, filariasis, ala azar, chikungunya, Japanese encephalitis and the zika virus.
“The pandemic and repeated natural calamities have drawn people’s attention towards the importance of insurance. We have covered more than 36 Lakh lives over 32,000+ corporates under corporate health insurance alone. Digit will continue enriching the portfolio focussing on providing people-benefitting products,” Digit Insurance founder and chairman Kamesh Goyal said.
According to an IBEF report, the Indian insurance industry was expected to reach $280 Bn by the end of 2020 and grow at a compound annual growth rate (CAGR) of 12-15% over the next three to five years. The market is expected to grow as the Indian government pushes for insurance penetration and proliferation of insurance schemes.
Insurance tech has been one of the hottest sectors for VCs in India after the Indian government increased the permissible foreign direct investment limit (FDI) from 49% to 74% in insurance companies at the Union Budget 2021. This allowed foreign ownership and control of insurance companies in the country with certain safeguards.
Insurance sector analysts and experts said it is a positive move for the ecosystem as insurance companies are capital intensive and foreign investors continue to show strong appetite for participating in the Indian insurance story.
Founded in October 2017, Digit claims to have grown by 44%, with a premium of INR 3,243 Cr in FY21. It also claimed to have more than 2 Cr customers and said it has processed more than 4 Lakh claims. In the ongoing fiscal year (FY22), Digit said its GWP (gross weighted premium or the total premium (direct and assumed) written by an insurer) has grown by 70% during April-May 2021, versus 17% for the general insurance industry.