Gurugram-based insurtech startup Toffee Insurance, on Wednesday (December 17), announced that it has raised $5.5 Mn in a Series A funding round led by IVM Intersurer, Omidyar Network, Flourish Ventures, Accion Venture Lab and Kalaari Capital.
The company will be utilising the funds to expand its product portfolio, improve merchant and customer experience, enhance technology and increase distribution efficiency.
Founded in 2017, Toffee Insurance was started by Nishant Jain and Rohan Kumar. The company aims to make insurance accessible and affordable by creating relevant products in the insurance value chain. Previously, the company has raised $1.5 Mn (INR 10 Cr) in a seed funding round led by Kalaari Capital, Omidyar Network and Accion Venture Lab.
Toffee Insurance uses behavioural and consumption data to cocreate insurance products and abilities aided by artificial intelligence, machine learning and a substantially wide distribution network of over 4000+ point of sale outlets across 300 plus cities. The company works with a network of insurance partners like HDFC Ergo, Apollo Munich, Religare among others.
According to an IBEF report, the Indian insurance industry is expected to touch $280 Bn by 2020. However, digital insurance has a penetration of less than 4% in the country. In the coming years, the penetration is expected to grow at about 90% annually. Experts and analytics believe that this market has the potential to absorb a lot of players. However, high customer acquisition costs and heavy regulations are a roadblock to the growth of digital insurance players amid the traditional players like LIC and GIC.
Earlier this week, Bengaluru-based insurtech startup Digit Insurance had said that it is in talks to raise $80 Mn to $100 Mn from TVS Capital Funds, A91 Partners and Faering Capital. In November, Flipkart cofounder Binny Bansal had planned to invest an additional $20 Mn in Mumbai-based motor insurance provider startup Acko General Insurance. If this deal happens, he will double his investment in the company to $45 Mn.