Pune-based IT services company Zensar is set to acquire US- and Bengaluru-based insurance technology startup Cynosure for $33 Mn.
According to the reports, the move is aimed at expanding Zensar’s foothold in the growing property and casualty insurance sector. Post the acquisition, Cynosure will be managed by its founders, while its US and Bengaluru-based teams will be joining Zensar’s insurance vertical.
Commenting on the acquisition, Harsh Goenka, Chairman of RPG Enterprises and Zensar, said: “Insurance is one of the focus areas for Zensar. The combined capabilities of Cynosure, with its industry-leading Guidewire capabilities in the P&C insurance sector, and Zensar’s digital expertise will augment the company’s growth.”
Founded in 2013, Cynosure caters to mid-tier insurance firms. Its in-house platform Guidewire allows insurance companies to integrate various insurance practices, geared towards helping them go digital. The company reportedly recorded a revenue of $20 Mn in 2017, a 50% increase from the previous year.
On the development, Sid Wadhwa, CEO and co-founder, Cynosure, said, “As part of Zensar, we have the opportunity to offer more robust integrated solutions combined with its digital transformational and infrastructure capabilities. Our expertise in Guidewire platforms have enabled our customers in the P&C insurance space to reap long-lasting benefits which is now fortified by this combined entity.”
Insurance accounts for 15% of Zensar’s business and the acquisition is expected to help the company drive growth in the insurance vertical.
Speaking on the opportunities available in the insurance sector, Sandeep Kishore, CEO, and MD of Zensar said, “Cynosure is a Guidewire partner, and is well-respected in the marketplace, making it an expert in this area. It brings successful implementations, providing core system modernisation with rich customer relationships that will serve as a significant value addition to our offerings.”
Kishore also claimed that property and casualty insurance is a $2 Tn sector globally, growing much faster than life insurance.
Cynosure is the third in a series of acquisitions made by Zensar in the last 18 months as the company moves towards digital technologies such as automation, machine learning, artificial intelligence and blockchain.
The Insurance sector is a promising segment that major players like SoftBank are now looking to tap into.
In January, reports surfaced that SoftBank was in talks to invest in Indian online insurance aggregator PolicyBazaar at a valuation of $800 Mn.
As per a Nasscom report, the Indian fintech software market is forecasted to touch $2.4 Bn by 2020, from the current $1.2 Bn. According to Inc42 Datalabs, fintech startups have received highest ever investments of $3.01 Bn across 111 deals in 2017.
Amid this, the acquisition of Cynosure by Zensar is bound to help the company strengthen its foothold in the property and casualty insurance market.