Insurtech startup InsuranceDekho raises $150 million in Series A round led by Goldman Sachs and TVS Capital

Ankit Agrawal, co-founder and CEO, InsuranceDekho

Insurtech startup InsuranceDekho on February 14 announced that it has raised $150 million in a mix of equity and debt in Series A funding led by Goldman Sachs Asset Management and TVS Capital Funds. This is the largest Series A round till date for an Indian insurtech startup, coming at a time when the startup sector is still reeling under the impact of the prolonged funding winter.

Investcorp, Avataar Ventures and LeapFrog Investments also participated in this round. Founded in 2016 by Ankit Agrawal and Ish Babbar, InsuranceDekho is the insurance arm of the car-selling unicorn CarDekho.

Though Agrawal, co-founder and CEO, declined to comment on the valuation of this round, according to a Mint report from November it was being pegged at around $450-500 million.

About $110 million of this funding was in equity and the rest was in debt, a source privy to the details told Moneycontrol.

Speaking to Moneycontrol, Agrawal said, “With this funding, we want to build for Bharat and take our distribution to another 300-400 cities, continue building our tech stack and products, work on branding, and look at a couple of mergers and acquisitions opportunities that we have identified across technology and geography expansion capabilities.”

The startup is also working on new offerings and plans to expand its micro, small & medium enterprises (MSME) and life insurance portfolio of offerings. In the life insurance segment, it is experimenting with underserved segments like insurance products for house helps.

This was the Gurugram-headquartered startup’s first institutional fundraising outside. Earlier, the company had raised $20 million from CarDekho in 2020 internally. Having raised a significantly big round for its first-time fundraising, Agrawal explained that the company has been run frugally with a limited team of 1,400 employees and that its core B2B business isn’t capex heavy.

Ish Babbar, co-founder and CTO, InsuranceDekho, said in a statement:  “Insurance distribution in India is a complex problem that needs innovative solutions. The fundraising will enable us to deploy scalable Insurtech solutions in the areas of data analytics, artificial intelligence, last mile servicing and claims management while keeping customer experience at the core of everything.”

Rajat Sood, managing director at Goldman Sachs Asset Management added, “InsuranceDekho has demonstrated a proven ability to bring new-to-insurance channel partners to their platform while empowering them through technology-based solutions and working closely with insurers.”

Business model

Currently, most of InsuranceDekho’s revenue comes from motor, health and life insurance.

It is present in more than 1,300 towns covering 98 percent of pin codes in India. Targeted at Tier-2, Tier-3 cities and beyond some of its top geographies include Ranchi, Jamshedpur, Nashik, Nagpur, Kolhapur,  Aurangabad, Fatehabad, Hosur, Jammu, Tiruvallur, Muzaffarnagar, Udaipur, Gorakhpur, Vadodara, Siliguri, Asansol, Bokaro among others.

While Agrawal did not share a revenue run rate for FY23, he added that in terms of annualised premium run rate, the company will reach Rs 3,600 crore by March 2023 and Rs 4,500 crore by FY24 end.

InsuranceDekho charges a commission of about 25-30 percent on the premium collected for its insurance partners whose products it hosts on its platforms. It has around 46 partners offering about 380 products.

The source said that “about one-fourth of this premium commission goes to InsuranceDekho while the rest is taken by the insurance advisor.”

Some of its partners include HDFC Ergo, ICICI Lombard, Acko, LIC and Future Generali Life Insurance to name a few.

The startup at present has around 50 lakh customers and a network of 80,000 insurance advisors. It wants to expand this network to 2,00,000 by the end of 2023.