PolicyBazaar To Raise At Least $50 Mn From Alpha Wave Incubation

Online insurance aggregator PolicyBazaar could receive an investment in the range of $50-100 Mn from Alpha Wave Incubation (AWI), an early-stage fund anchored by Abu Dhabi’s state entity ADQ and managed by Falcon Edge Capital, a New York-based venture capital and hedge fund. 

The new funding could value the parent company of the Indian insurance tech unicorn, ETechAces Marketing and Consulting at $2 Bn, up from $1.5 Bn for its last funding round. ETechAces also operates the online lending marketplace PaisaBazaar.

In July, PolicyBazaar had raised $130 Mn from Japanese multinational conglomerate SoftBank Vision Fund, in exchange for a 15% stake in the company. That investment was a mix of pre-decided primary infusion of capital into the company of about $50 Mn and the purchase of shares worth $80 Mn. 

Founded in 2008 by IIT Delhi and IIM Ahmedabad alumni Yashish Dahiya, Alok Bansal and Avaneesh Nirjar, PolicyBazaar is an online platform allowing users to purchase insurance policies, ranging from life insurance to car insurance and even two-wheeler insurance. The startup does this as it features products from all major insurance companies in India, to help its users decide the policy which suits them the best.

According to a report in the Economic Times, which first reported the development, the upcoming funding would be a mix of secondary and primary capital. Further, AWI has already acquired shares in PolicyBazaar worth $20 Mn from one of its existing investors, True North, a private equity fund. 

The funding from AWI is likely part of a larger funding round. In July, PolicyBazaar’s co-founder Yashish Dahiya had told Bloomberg that the startup was planning 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. 

According to the Indian Brand Equity Foundation, insurance penetration in India is as low as 4%. Moreover, only 3% of all insurance is bought online in India in an $80 Bn market. It is to be noted that while India’s insurtech market is growing, the addressable market base is not growing as rapidly owing to the slow adoption for digital insurance services in non-urban areas.