The insurtech start-up said it plans to deploy the fresh capital to broaden its healthcare offerings and hire more talent across technology, product and data science roles
To become a unicorn, insurance policy provider (Insurtech) Acko is the latest Indian start-up, joining nearly three dozen other firms in the world’s second-largest internet market that have attained the coveted status this year.
Bringing its all-time raise to $450 million, the Bangalore-headquartered insurtech start-up said it has raised $255 million in a new financing round. The new financing round, which is subject to approval from the country’s insurance regulator, was led by General Atlantic and Multiples Private Equity.
CPPIB, Canada’s largest pension fund and Lightspeed Growth as well as existing investors Intact Ventures and Munich Re Ventures also participated in the round, which values the five-year-old start-up at $1.1 billion, up from $500 million a year ago.
With a digital-first product, the insurtech start-up is attempting to take on the country’s antiquated insurance industry. To employers, as well as protection on gadgets it develops and sells bite-sized auto insurance products (aimed at drivers and others in transportation-related scenarios), and healthcare protections.
The insurtech start-up has distribution partners with a number of firms including Amazon, which is an existing investor in Acko, as well as travel and hotel booking platform MakeMyTrip, ride-hailing firm Ola, insurance giant Bajaj Finance and Urban Company.
With companies including food delivery giants Swiggy and Zomato, the insurtech start-up covers nearly a million gig workers in the country through partnerships. Overall, Acko has amassed over 70 million customers and is clocking a run rate of $175 million in premiums.
In India, offering a large catalog of bite-sized insurance policies is crucial for firms. Only a fraction of the nation’s 1.3 billion people currently have access to insurance and most can’t afford sizable policies.
According to rating agency ICRA, insurance products had reached less than 3% of the population as of 2017. An average Indian makes about $2,100 a year, according to the World Bank. ICRA estimated that of those Indians who had purchased an insurance product, they were spending less than $50 on it in 2017.
“ACKO has meaningfully redefined the protection category for consumers and plans to continue innovating in the space. We strongly believe in supporting our customers in protecting their valued assets or the health and safety of their loved ones via a differentiated product and value-added service”, said Varun Dua, founder and chief executive of the insurtech start-up.
“Insurance and protection must work for people based on their unique risks and needs in a seamless, reliable fashion. We are thrilled to partner with trusted investors who have a deep understanding of the regulatory environment and bring first-hand experience in working with innovative, high-growth companies”.
The insurtech start-up said it plans to deploy the fresh capital to broaden its healthcare offerings and hire more talent across technology, product and data science roles.
“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”.
The funding comes at a time when scores of Indian start-ups are raising record amounts of capital at an unprecedented pace in India. This week itself, cross-border payments start-up Zolve, agritech firm DeHaat, fin-tech Groww, and Ed-tech Teachmint unveiled their new funding rounds. TechCrunch reported earlier this week that Tiger Global and Falcon Edge Capital are in advanced stages of talks to mint another unicorn in India (DealShare).
Policybazaar, which competes with Acko, will open its initial public offering next week. The insurtech start-up is looking to raise over $800 million in the IPO.
CIO News, a proprietary of Mercadeo, produces award-winning content and resources for IT leaders across any industry through print articles and recorded video interviews on topics in the technology sector such as Digital Transformation, Artificial Intelligence (AI), Machine Learning (ML), Cloud, Robotics, Cyber-security, Data, Analytics, SOC, SASE, among other technology topics.