SUMMARY
PolicyBazaar plans to raise $250 Mn at a valuation of $2 Bn before the IPO
PolicyBazaar counts SoftBank, Tencent Holdings and Tiger Global Management among its investors
The startup’s losses shot up 21.6X in 2019, and it plans to return to profitability before next year’s IPO
Online insurance aggregator PolicyBazaar’s co-founder Yashish Dahiya told Bloomberg that the startup plans to raise $250 Mn in a round of financing at a valuation of $2 Bn, before issuing its initial public offering (IPO) in September 2021.
PolicyBazaar is planning to go public next year, at a valuation of more than $3.5 Bn. If and when it happens, it will become India’s first unicorn to debut on the stock market.
“The IPO size will be about $500 Mn. We have global interest and will raise in the coming weeks for the pre-IPO financing,” Dahiya said from London, where he is currently based.
Earlier this month, SoftBank Vision Fund, a Japanese technology-focused venture capital fund, picked up an additional stake for $130 Mn in PolicyBazaar’s parent company EtechAces Marketing and Consulting. The recent investment was a mix of pre-decided primary infusion of capital into the company at about $50 Mn and the purchase of shares worth $80 Mn. SoftBank now has a 15% stake in the company, after having previously invested $200 Mn in a Series F funding round in 2018. Besides SoftBank, PolicyBazaar also counts Tiger Global Management and Tencent Holdings among its investors. While Tiger Global holds a 10% stake in the company, Tencent holds 8%.
PolicyBazaar plans to list in Mumbai, but Dahiya is open to a dual listing if the rules change. India is reportedly planning to tweak regulations to permit overseas listing. Many startups have incorporated in the US and Singapore, where public listing rules and other considerations are friendlier but India currently prohibits that for sensitive sectors like financial services.
Founded in 2008 by IIT Delhi and IIM Ahmedabad alumni Yashish Dahiya, Alok Bansal and Avaneesh Nirjar, PolicyBazaar is owned by EtechAces Marketing and Consulting. The company also has two other sister companies — PaisaBazaar, which is a lending marketplace, and healthtech venture DocPrime. PaisaBazaar was launched in February 2014 as a financial advisory platform. Due to falling demand in the lending industry, PaisaBazaar had to reportedly lay off 1500 people earlier this month.
PolicyBazaar turned profitable in the financial year 2017, but a year later it registered INR 9.42 Cr in losses. FY 2019 turned out to be tougher for PolicyBazaar as its losses shot up 21.6x to INR 213.12 Cr. According to the ministry of corporate affairs fillings accessed by Inc42, the company’s advertising and promotional expenses for the year had boomed 5.5x to INR 207.24 Cr from INR 31.85 Cr in FY18. Now PolicyBazaar has decided to go public by the end of 2021, after becoming profitable again.
