Flipkart co-founder Binny Bansal and the fund led by Kabir Misra, ex-managing partner at Softbank among others have led a $65 million Series C round in digital insurer Acko General Insurance Ltd., in a deal that showcases rising interest in India’s online insurance space from billionaires and venture capitalists alike.
Intact Ventures, the corporate venture arm of Canada’s largest property and casualty insurer was the other new investor in the round. Existing investors Amazon, Accel Partners, SAIF Partners, and TechPro Ventures, the family office of Hexaware founder Atul Nishar also participated.
The deal also marked RPS Ventures’ second investment, after it backed social commerce platform Meesho in November last year. Avendus Capital was the banker to the deal.
Founded by Varun Dua, Acko received one of India’s biggest seed rounds at the time, when in 2017 it raised $30 million from marquee venture capital funds Accel Partners, SAIF Partners, Infosys founder Narayana Murthy’s Catamaran Ventures and Infosys co-founder Kris Gopalakrishnan. It followed this up with $12 millon round in May last year led by Amazon India and Ashish Dhawan, founder of homegrown private equity fund ChrysCapital.
Acko plans invest the funds raised in technology and analytics,a focus area for the insurer. It currently employs about 50 people on the technology side, which it wants to increase by 3-4 times in the next 18 months, Varun Dua, founder and CEO, said a phone interview.It also plans to invest significantly in advertising and branding to build up consumer trust.
Acko has been operational for 15 months, and has insured about 2 lakh vehicles and reached out to twenty million customers via its bite sized offerings, Dua said. It ties up with companies such as ride hailing app Ola, Amazon, etc to insure rides or packages, which it refers to as bite sized insurance. Acko also plans to launch new product lines- such as foraying into health and travel insurance at the end of the year.
In recent times, India’s online insurance space has seen a spate of fundraises in a fragmented and underpenetrated market, as these startups look to scale and cut down losses. Online insurer Turtlemint, which provides a technology platform for insurance agents
to sell products raised $25 million led by Sequoia Capital in January this year, while according to an Economic Times report, online insurance aggregator Coverfox is looking to raise up to $50 million.
Another insurer, Digit Insurance, raised $44 million from Fairfax Holdings, owned by billionaire Prem Watsa, in July last year. However, the online insurance pack is led by Softbank-backed Policybazaar, which helps compare and buy different types of insurance products. Softbank led a $200 million round in Policybazaar in June last year, catapulting it to the coveted unicorn club of startups valued at over a billion dollars.
According to Dua, the non-life insurance market is worth about $25 billion, and is growing at 15-20% compounded annually. Of this, about 6% of the market is online. With the sector growing fast and internet penetration and digital eyeballs rising, investors and insurancestartups see an opportunity to scale and build quality products.
While the Acko deal marks one of Binny Bansal’s first deployments of the billion dollar wealth he amassed from Flipkart’s sale to Walmart, he has been an active angel investor as well. Some of his previous investments include tech-based learning startup Unacademy,fitness platform Cure.Fit, and data-driven healthcare startup SigTuple.
