InsuranceDekho Inches Closer To Clinching Unicorn Tag With $60 Mn Funding

Delhi NCR-based insurtech startup InsuranceDekho has raised $60 Mn in its ongoing Series B funding round. 

The round, a mix of debt and equity, saw participation from Japanese giant Mitsubishi UFJ Financial Group, Inc. (“MUFG”), insurer BNP Paribas Cardif, through its insurtech fund managed by European investment major Eurazeo, India’s Beams Fintech Fund and Yogesh Mahansaria Family Office. 

The insurtech soonicorn’s existing investors – TVS Capital, Goldman Sachs Asset Management and Avataar Ventures – also participated in the round. 

According to Inc42 sources, the startup has been valued at around $650 Mn-$700 Mn in the funding round.

The fundraise comes seven months after InsuranceDekho secured $150 Mn in its Series A funding round at a valuation of over $500 Mn. 

The insurtech soonicorn plans to utilise the fresh funds to boost marketing activities, expand distribution in the Indian hinterland, scale up its tech platform, and explore inorganic growth opportunities. 

It will also invest some part of the capital raised on its new initiatives like reinsurance to continue democratising and revolutionising the insurance landscape in India.

Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself from the risk of a major claims event.

Founded by Ankit Agrawal and Ish Babbar in 2017 as the insurance arm of online car marketplace CarDekho, InsuranceDekho received $20 Mn from its parent firm Girnar Software in 2020. Later, it was hived off to function as a separate unit.

Commenting on the fundraise, Ankit Agrawal, CEO and founder of InsuranceDekho, said that the new investment will bolster the startup’s drive to expand reach, cater to more consumers, and bring additional innovations within the insurtech domain.

“The insurance sector in India is at the cusp of a tech-backed revolution and I believe InsuranceDekho is well positioned as one of the pioneers leading this transformation,” Agrawal said in an official statement.

Mirroring LIC To Penetrate Deeper Into India

In an earlier interaction with Inc42, Agrawal shared the core thesis of the startup, which focusses on adopting an LIC approach in the lesser-tapped rural and semi-urban areas of the country. Just like LIC, the insurtech soonicorn has engaged thousands of agents on a contractual basis to facilitate the sale of insurance policies.

In 2015, the Insurance Regulatory and Development Authority of India (IRDAI) introduced the Point of Sales Persons (PoSPs) distribution model, which permitted companies to recruit individuals from diverse backgrounds, provide them foundational training, and empower them to offer pre-underwritten insurance products to clients.

InsuranceDekho was quick to capitalise on this, securing its broking licence in 2017, thus gaining an early advantage in the market.

“Even if we are deploying the field workers or our sales agents to sell policies, we are a tech-first company and hence that gives us an edge over the legacy firms when it comes to deploying technology right from premium collections to claims settlements. And the numbers speak for themselves,” Agrawal said during the interaction.

Currently, the startup has a presence in over 1,500 regions, encompassing 98% of the country’s pin codes. Interestingly, it sources 90% of the premium from Tier II regions and beyond.

The insurtech startup claims to have served 6 Mn+ customers to date and is insuring 12 Indians every minute (as of September 2023).

Its operating revenue soared to INR 96.4 Cr in FY23 from INR 47.9 Cr in FY22, while net loss declined 29% to INR 51.5 Cr from INR 72.2 Cr in the preceding fiscal year on robust business growth.

According to the startup, it is on course to achieve a premium of INR 3,600 Cr for this fiscal year. Additionally, it aims to onboard 2 Lakh agent partners to its platform by March 2024. 

Inside India’s Insurtech Boom

The insurance industry in the country is going through a paradigm shift, driven by the emergence of insurtech players who are looking to redefine the traditional approach to purchasing insurance.

As per the IRDAI data, life insurance premiums in the country are projected to grow to INR 24 Lakh Cr ($317.98 Bn) annually by FY31.

Further, Inc42 estimates that the insurtech space is growing at a CAGR of 57%. This means that between 2021 and 2025, the market opportunity for insurtech players is expected to rise by 6X.

Low overall insurance penetration in the country (just 4.2% as per IRDAI data) and the rise in disposable incomes have created a conducive environment for the emergence of more insurtech startups.

PolicyBazaar, Acko, Digit, and Turtlemint are among some of the other prominent insurtech startups in the country.

In terms of financial performance:

• Acko reported a loss of INR 738.5 Cr in FY23, up 53% from INR 482.3 Cr in FY22. Its operating revenue rose 32% to INR 1,758.6 Cr in FY23 from INR 1,334.4 Cr in FY22.
• Turtlemint’s net loss grew 4.4X to INR 7.2 Cr in FY22 from INR 1.6 Cr in FY21. Its total revenue rose 1.5X to INR 99.4 Cr in FY22 from INR 63.1 Cr in FY21.
• PB Fintech, the parent company of Policybazaar, saw its operating revenue surge 79% YoY to INR 2,557 Cr in FY23, while its loss declined to INR 487.9 Cr from INR 832.9 Cr in FY22.
• IPO-bound Digit Insurance reported a net loss of INR 295.8 Cr in FY22, a 141% jump from INR 122.7 Cr in FY21. Its total insurance premium rose 75% to INR 3,404.2 Cr from INR 1,943.6 Cr in the previous fiscal year.