Mumbai-based online insurance brokerage platform Coverfox has raised $22 Mn in a Series C funding round led by IFC, a member of the World Bank Group; Transamerica and other existing investors.
The startup will use the Series C funding to expand insurance coverage into Tier-II and Tier-II cities and specifically address women’s needs. The technology team will also get a shot in the arm, driving new development and innovation, including turbocharging Coverdrive, an initiative launched in 2017.
Commenting on the investment, Jun Zhang, IFC Country Head of India said, “India has one of the most underpenetrated insurance markets, with low penetration rates for women and rural populations. By investing in Coverfox, the IFC is giving a push to the country’s digitisation agenda by leveraging technology to deliver insurance products to customers outside metros and to women who are currently underserved.”
Founded in 2013 by Devendra Rane, Coverfox offers its users proprietary technology and algorithm-based platform to compare and buy a range of policies across top insurance companies. It claims to have integrated with more than 35 insurers and offers more than 150 policies in motor, life and health insurance.
On the funding, Premanshu Singh, Chief Executive Officer, Coverfox said, “The passionate team at Coverfox is building Asia’s best insure-tech platform to help end-users buy any policy without getting spammed by telecallers. The current fundraising is a validation of our vision. The money would be used to strengthen our product or technology capabilities. Further, a large portion of the investment would go into improving the user experience by going both horizontal and vertical into each insurance category.”
Coverfox: Growth With Stronger Financials
The startup settles 150 to 200 claims a month and has sold around 120K policies to date. With all this in place, the startup is further looking to capture a 50% market share in the online motor insurance segment by July 2018.
The company is operated by Glitterbug Technologies Pvt. Ltd., which owns about 26% of the Coverfox.
Coverfox had earlier raised $17 Mn in Series A and B funding together, from SAIF Partners, Accel and NR Narayana Murthy’s private investment arm – Catamaran Ventures.
In its What The Financials series, Inc42 Datalabs revealed that Coverfox’s Gross revenues for FY16-17 jumped to $901K (INR 6.12 Cr) from $383K (INR 2.64 Cr) in the previous year, clocking a 132% growth.
Furthermore, the net loss came down by 10% to $4.7 Mn (Rs 31.86 Cr) from $5.1 Mn (INR 35.07 Cr), as total expenses rose marginally to $5.4 Mn (INR 37.98 Cr) from $5.5 Mn (INR 37.71 Cr).
Although Coverfox’s revenues have grown by a CAGR of 236%, its expense has grown by a massive 777% and with poor solvency ratio.
The Indian fintech market, currently standing at $1.2 Bn, is forecasted to touch $2.4 Bn by 2020. Investments in insurance startups rose by 550% to $92 Mn in 2017 from a year earlier, according to Inc42 Datalabs.
As the startup works to capitalise on the growing insurance segment, the latest boost for Coverfox with Series C funding brings a promising action in the space.