In its continuing Series B investment round, Japanese financial services giant Mitsubishi UFJ Financial Group, BNP Paribas Cardif, which invested through its insurtech fund, and Beams Fintech have collectively contributed $60 million to insurance marketplace InsuranceDekho.
Yogesh Mahansaria’s family office, the managing director of Mahansaria Tyres, a significant tire producer, also took part in the round.
Funds came from previous investors TVS Capital, Goldman Sachs Asset Management, and Avataar Ventures in addition to the new investors.
After the financing, the company’s valuation increased by 50% overall. InsuranceDekho declined to comment on the precise valuation, but according to reports, the transaction valued the business at between $700 million and $750 million. The corporation asserts to be profitable in its main distribution sector, but altogether it is still losing money due to continued expenditures in new business lines. InsuranceDekho reported a net loss of Rs 234 crore on revenue of Rs 1,650 crore in FY22, the most recent financial year.
Interestingly, InsuranceDekho has raised two back-to-back fundraising rounds this year despite the fact that venture capital has been difficult to come by, particularly in growth rounds. It raised more than $200 million in total after closing $150 million in fundraising in January.
“We’ll use the new capital to pursue certain options for inorganic expansion. Ankit Agrawal, CEO of InsuranceDekho, stated, “We are looking into several acquisition prospects that we expect to close soon. He continued, “There are discussions taking place about improving our technology and distribution capabilities, but those discussions are currently secret.
With the current round, Agrawal also plans to increase the company’s tech skills and make investments in marketing and brand-building.
“We want to get into reinsurance, too. We are in the midst of submitting an application to the IRDAI for a composite brokerage licence, which will allow us to also act as a broker for reinsurance policies, the man added.
Although it is an online marketplace for insurance products, InsuranceDekho also has a significant physical presence. It is referred to as a POSP (point-of-sales person) business in industry jargon. The organisation currently has about 1.1 lakh field agents, and by the end of the financial year, they hope to have 2 lakh. It presently processes 3,000 crore rupees worth of premiums annually, and by the end of the current fiscal year, it hopes to treble that amount.
The business model of the Gurugram-based company allows its agents to offer insurance products throughout the nation’s Tier 2 and Tier 3 cities. InsuranceDekho is creating its own network to physically distribute insurance products, much to the Life Insurance Corporation of India (LIC), which built its distribution through networks of part-time agents. It offers life insurance, term insurance, auto insurance, and a few other types of general insurance. At the moment, it employs about 1,900 people.
It faces rivalry from businesses like publicly traded Policybazaar and venture-funded Turtlemint. Policybazaar’s current priorities also include growing its own POSP company.
On June 12, ET reported that 42% of Policybazaar’s total revenue is currently generated by its new business segments, which includes the physical agent industry.
Agrawal stated that he wants to go public with the business by 2026–2027. CarDekho, an online marketplace for pre-owned and new four-wheel vehicles, introduced InsuranceDekho in 2017. However, the business left its incubator and now runs on its own.