FinTech: Indian Insurance Marketplace PolicyBazaar Plans $500M IPO
The SoftBank backed startup will likely garner a valuation of over $3.5B.
Yashish Dahiya, the co-founder of the online Indian insurance platform PolicyBazaar, has big financing plans for it. In the coming weeks, he hopes to raise $250 million of pre-IPO financing at a likely valuation of $2 billion. That will be followed by an IPO sized $500 million in September 2021. Dahiya said there was global interest in the funding round, likely to close in the coming weeks. (Bloomberg)
PolicyBazaar: top-notch backers
Currently, SoftBank and Temasek hold approximately 15% each of the firm, while Tencent and Tiger Global own about 10 and 8%, respectively.
At a valuation likely to be over $3.5 billion, PolicyBazaar’s $500 million IPO would mark the financial market debut of a poster-child of the Indian digital startup scene.
Its bumper valuation would account for:
- Insurance penetration in India was less than 4% in 2017, according to the India Brand Equity Foundation
- Insurance industry revenue could touch $280 billion this year
- Over the next three to five years revenues could leapfrog by up to 15% annually
- Policybazaar sells a million policies per month and is India’s largest insurance aggregator
- Since its launch in 2008, Policybazaar has achieved 100% year-on-year growth
- It achieved 10 million customers by 2019
2018 expansion a “mistake”
However, growth aside, PolicyBazaar stumbled into loss-making territory after a $200 million funding in 2018 led by SoftBank Group.
The insurtech thereafter went ahead and boosted capacity by hiring call center and operations staff to grab more market share. It also splurged on advertising and promotion.
Earlier this month, on a video interview with FT, Dahiya called the move a mistake that pushed the company into losses.
However, it appears that PolicyBazaar is now profitable, whereas other high-profile startups such as budget hotel chain Oyo and payments platform Paytm are lossmaking.
Speaking to PTI, Dahiya said the company should log revenues of ₹1,100 crores and post a marginal profit during the current fiscal 2020-21. The COVID-19 pandemic triggered a surge in demand for insurance. As a result, year-on-year growth this year is running at between 70% and 100% depending on the product, reported LiveMint.
Image of 13 June 2018; Yashish Dahiya, Co-Founder & CEO, PolicyBazaar: MoneyConf/Flickr
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