Private equity investor True North and venture capital firm IDG Ventures India are planning nearly $20 million investment in ETechAces Marketing and Consulting (parent company of online insurance aggregator PolicyBazaar), according to sources close to the matter.
This investment is reportedly part of $78 million (Rs 500 crore) round led by asset management giant Wellington Management.
This latest round of funding will apparently help PolicyBazaar in partly meeting the IRDA’S (Insurance Regulatory and Development Authority of India) investment criteria that mandates all Indian insurance companies to have 51% investment by domestic investors.
True North and IDG Ventures have so far not commented, while PolicyBazaar is also keeping mum over the report.
PolicyBazaar is one of the well-funded start-ups in insurance aggregator space and is widely regarded as a poster boy of the insurance aggregator industry. The startup counts big names like Tiger Global, Info Edge, Premji Invest and Temasek among its high profile investors.
Last year, reports were rife in the media that the startup is planning to raise $100-million through an IPO in the U.S. capital market by the end of 2018. If this does materialize, then It would become one of the few Indian startups including MakeMyTrip and JustDial to be listed in Nasdaq.
PolicyBazaar was incorporated by Yashish Dahiya and Alok Bansal with an aim to provide best and most profitable insurance deals to Indian consumers. The company mainly provides aggregation services in life insurance and general insurance categories.
Insurance aggregator space is believed to have a lot of potential for growth, but surprisingly the industry has merely 7 to 8 startups. This is partly because of the IRDA’s tough rules and regulations, which critics claim are major deterrents for start-ups to enter in this space. Apart from PolicyBazaar, the other startups in this space include BankBazaar, Coverfox, PolicyX and EasyPolicy.