"BankBazaar has recently mandated investment bank UBS to raise between $80 million to $100 million,” said one of the sources.
Online financial product marketplace BankBazaar has initiated talks with investors for raising capital, multiple individuals with knowledge of the matter told Moneycontrol. The Chennai-headquartered firm, which counts Amazon and venture capital fund Sequoia Capital among its major stakeholders, last raised funds in October 2017.
"BankBazaar has recently mandated investment bank UBS to raise between $80 million to $100 million,” said one of the individuals cited above.
“Key performance ratios have more than doubled since the last fund raising round in 2017 and in this round, the valuation of the company should comfortably be upwards of $500 million" the person said.
In October 2017, UK-based credit rating agency and information management company Experian picked up a 10 percent stake in BankBazaar for $30 million, valuing the marketplace around $300mn.
"The funds will be used for acquiring customers, marketing and for expanding paperless products. There will be new investors (strategic, quasi-strategic or financial) participating in this round as well as some existing investors," said a second source. Sequoia and Amazon are the biggest shareholders in the company. Other stakeholders include Fidelity Growth Partners, Mousse Partners and Walden International.
BankBazaar was founded by Adhil Shetty, Arjun Shetty and Rati Shetty in 2008. The marketplace helps consumers compare offers on credit and debit cards, loans, savings and investment products and insurance across various banks and non-banking financial companies. Its rivals in this segment include PolicyBazaar (which became a unicorn last year and is a dominant player in the space), CoverFox, MyInsuranceClub amongst others. Earlier this year, BankBazaar tied up with Ujjivan Small Finance Bank for providing personal loans.
"BankBazaar's USP is that it’s a pure digital play in its segment," added a third source familiar with the fund-raise plans.
“Online financial products marketplaces are extremely relevant in a heterogeneous market like India. It helps market the products to select slivers of consumer segments more efficiently and also promotes creation of more utility products that benefit the end users as against only those products that could offer higher distribution margins to cater to physical channels,” says Karan Sharma, the executive director & co-head (Digital & Technology Investment Banking) of Avendus Capital.In response to email queries from Moneycontrol, UBS declined to comment on the “market speculation” while a BankBazaar spokesperson said, “At this point, we have no official comment on this query.”
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