Tiger Global Management May Exit Policybazaar In $300 Mn Deal : Report

Private equity firm Tiger Global Management is said to be in talks with Chinese internet giant Tencent and Japan’s SoftBank to sell its 21% stake in the parent entity of online insurance startup Policybazaar and Paisabazaar with Chinese internet giant Tencent and Japan’s SoftBank Vision Fund among the investors who are looking to pick up the stake. 

Tiger Global Management is reportedly seeking $300 Mn in the stake sale in the parent entity  Etechaces Marketing and Consulting at a valuation of $1.5 Bn. The valuation expectation for the secondary sale is higher than the $1Bn level at which SoftBank invested in the company last year.

“Tiger Global has appointed a banker for the stake sale and Tencent is likely to come in as a new investor. SoftBank may also increase its stake to about 20% in the company,” one of the sources familiar with the development told ET.

PolicyBazaar Group has two entities: PolicyBazaar and PaisaBazaar. PolicyBazaar started its operations in 2008 as a web aggregator and comparison website for insurance products. Later, in February 2014, it started PaisaBazaar — its financial advisory platform — thereby marking its entry in the digital lending space.

In June of last year, PolicyBazaar raised more than $200 Mn in a Series F round of PolicyBazaar which reportedly valued the company over a billion dollars, making it a unicorn. 

The stake sale comes at a time when the union government has announced in its budget that it would allow 100% FDI in insurance intermediaries which till now were capped at 49%. 

Tiger Global exited Flipkart last year when Walmart bought over the commerce company, making over $3 billion and also made a partial exit from India’s top ride-hailing service Ola earlier this year.

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 life insurance and general insurance. The startup also features products from all major insurance companies in India, to help its users decide the policy which suits them the best.

For FY 2018, PolicyBazaar’s revenue reached $21.67 Mn (INR 159.4 Cr), against $6.67 Mn (INR 49.1 Cr). I

Interestingly, operational revenues contributed 99.3% of total revenues reaching $21.52 Mn (INR 158.3 Cr). This came on the backdrop of a 383% increase in its operating income in FY17.