Digital-only insurance platform Toffee Insurance has raised $1.5 Mn (INR 10 Cr) in a Seed funding round led by Kalaari Capital, Omidyar Network and Accion Venture Lab.
Toffee plans to use the funds to focus on product development and create efficiencies in channel approach as well as expanding its team. The startup also intends to build a strong insurtech team with capabilities across data science, machine learning and AI.
Highlighting the reason behind choosing to invest in Toffee Insurance, Vani Kola, Managing Director, Kalaari Capital said, “Insurance is highly under-penetrated in India and it needs product innovation to reach the masses. Rohan and Nishant are onto the mission of creating simple and small ticket size insurance products and distribute them in a very contextual way and this has huge potential to drive a mass adoption. We are very excited to be a part of the Toffee Insurance journey.”
Founded by Nishant Jain and Rohan Kumar in 2017, Toffee is a technology platform focussed on providing contextual and relevant insurance offerings to a growing youth demographic. The startup got its initial support from angel investors such as Vivek Gujral and Harshal Shah.
Toffee’s initial lineup of products spans across covering health, lifestyle and personal accidents with a core focus on simplicity and includes products such as StayFit Toffee, Anti-Dengue Toffee, Globetrotter Toffee, Renter Toffee, Commuter Toffee, Backpacker Toffee, etc.
With Toffee, buying insurance takes less than 90 seconds and claims which are simple are processed in under two hours via a completely digital interface as claimed by its team. Also, currently, the platform is integrated with seven insurance manufacturers to facilitate real-time policy issuance and processing of claims.
As Rohan Kumar said, “Our goal is to unbundle products and repackage them in a youth-friendly way that focusses on the benefits of insurance to almost make it a commoditised way to sell insurance rather than as a financial product.”
The insurance space in India is currently dominated by banks and government agencies such as LIC, GIC, etc. But the digital startups are gaining pace as well.
There are a plethora of online startups catering to the insurance of the consumers such as PolicyBazaar and CoverFox, as well as there are also startups that look into other financial needs of consumers such as EarlySalary, Capital Float, and more.
Even major investors like SoftBank are now looking to tap into the Indian insurance vertical. Recently, reports surfaced that SoftBank was in talks to invest nearly $200 Mn in Indian online insurance aggregator PolicyBazaar at a valuation of $1 Bn.
Although the sector is getting crowded, the market itself is far beyond the saturation point. As per IBEF march 2018 report, the country’s insurance market is expected to quadruple in size over the next ten years from its current size of $60 Bn.
There’s still room for innovation, something Toffee insurance is trying to utilise with its innovation, especially by bringing its niche specifically centered around millennials.