Digital insurance company Acko General Insurance said on October 28 that it raised $255 million in a Series D round led by General Atlantic and Multiples Private Equity. The company became the 34th startup to turn unicorn in India in 2021 with this round raising its valuation to $1.1 billion.
A unicorn is any privately held entity with a valuation of $1 billion or above.
The round also included participation from Canada Pension Plan Investment Board and Lightspeed, as well as existing investors Intact Ventures and Munich Re Ventures. This fundraise values the Company at USD 1.1 billion. Acko’s total funds raised now stand at $450 million.
The company said it intends to further invest in the healthcare vertical and scale its team, particularly within technology, product and data science.
Varun Dua, Founder and CEO of Acko said, “We will continue to scale and innovate in our flagship auto insurance business. We also continue to deepen our health strategy and intend to invest over $150 million in the health business in the near future. We believe health insurance products, claims innovation and a deeply connected ecosystem of health services that improve health outcomes for customers are today’s most urgent needs.”
Founded in 2016 by Dua and Ruchi Deepak, Acko has over 70 million customers, clocking a run-rate of approximately $150 million in premiums. The digital insurance company entered the health insurance vertical last year with a focus on the employer-employee market. It is set to launch its retail health insurance product by early next year.
Shantanu Rastogi, Managing Director at General Atlantic, said, “Acko has developed a differentiated and scalable business model based on a singular customer focus, value-based pricing, highly-rated service and deep technology capabilities. We believe that Acko has the potential to emerge as an insurer-of-choice for the 100 million-strong digitally-native Indian customer base over the next decade and can play a meaningful role in shaping the future of insurance in India.”
Insurance is a highly underpenetrated space in India with only 4.2 percent of Indians having insurance. For FY21, the Indian Brand Equity Foundation (IBEF) pegged life insurance penetration at 3.2 percent and non-life insurance penetration at 1 percent.
However, the pandemic has given a boost to the insurance space with the crisis driving Indians to buy health and life insurance products. The insurtech space includes aggregators as well as insurance companies with other players like Policybazaar, Paytm, Digit, Turtlemint, Toffee Insurance, Plum in the space, among others.
“Acko has revolutionized general insurance through its D2C technology led model, product innovation and exceptional customer experience. What stood out for us is Varun Dua’s entrepreneurial energy and superb execution over the last four years,” said Nithya Easwaran, Managing Director at Multiples Alternate Asset Management.
Acko’s other investors include Amazon, Accel, Elevation, Ascent Capital, Intact Ventures, Munich Re Ventures and Flipkart co-founder Binny Bansal, among others.
With auto insurance being its lead product, Acko also has a fair share in embedded insurance products like mobility and gadget insurance across digital consumer platforms like Amazon, MakeMyTrip, Ola, Urban Company, Bajaj Finance and others. In addition, Acko covers nearly a million gig workers through partnerships with companies including Zomato and Swiggy.