PolicyBazaar raises $200 million in funding round led by SoftBank, enters the unicorn club

Meet the newest unicorn in town: PolicyBazaar.com. ETechAces Marketing & Consulting, which operates the online insurance aggregator, yesterday announced that it has raised over $200 million in a new investment round led by SoftBank Vision Fund. The Series F round also saw participation from existing investors, including InfoEdge (Naukri.com).

"SoftBank's culture of backing disruptive businesses and industry leaders with long-term capital investment gels well with our own values and vision of creating a transparent and empowering financial products marketplace," said Yashish Dahiya, co-founder and Group CEO of EtechAces, in a statement. "We hope to gain a lot from their global footprint and experience," he added.

According to sources, PolicyBazaar's current valuation is pegged at over $1 billion with this latest transaction. The company spokesperson declined to comment on the valuation but told PTI that a part of the funds would be used to grow the lending, investment and insurance business along with new initiatives such as healthcare tech and services and international expansion. According to The Times of India, the online insurer has doubled its valuation since it closed its previous fund-raise last year.

In a BSE filing, InfoEdge disclosed it has signed an agreement with SoftBank to jointly invest $90 million in Etechaces Marketing and Consulting for a 8.93 per cent stake on a fully-diluted basis. The investment has been structured through Diphda Internet Services.

As per the agreement, Japan's SoftBank will invest $45 million for a 49.99 per cent stake in Diphda while InfoEdge will invest a similar amount for the remaining stake.

Founded in 2008, PolicyBazaar has raised a total of $366 million through half a dozen funding rounds, excluding the seed funding round, added the spokesperson. Its other investors include Temasek, Tiger Global Management, True North, Premji Invest, besides investments from other PE funds and family offices.

"We believe that the Indian insurance market continues to remain massively under-developed and PolicyBazaar, supported by SoftBank's capital and ecosystem, is uniquely positioned to dramatically increase the adoption of insurance products in the country," said SoftBank Investment Advisers Partner Munish Varma.

PolicyBazaar's statement also cited a report by Boston Consulting Group to state that digital influence on insurance purchases will grow to 50 per cent for life insurance and 75 per cent for general insurance by 2020. According to the company, this translates to nearly Rs 1,20,000 crore of new insurance premiums being digitally influenced by 2020. "PolicyBazaar believes this will enable it to grow at a CAGR of more than 80 per cent over the next three years achieving 10 million transacting customers by 2020," it added. Currently, it hosts over 100 million visitors yearly and records sale of nearly 300,000 transactions a month.

In the meantime, India's unicorn club is growing fast. Just last week, food delivery platform Swiggy raised $210 million (over Rs 1,430 crore) in fresh round of funding led by Naspers and DST Global, to reportedly join the elite club, so named because of the rarity of start-ups reaching the $1 billion valuation mark. Previously, in February, Ant Financial Services Group - Chinese behemoth Alibaba's subsidiary - invested $200 million in Zomato, propelling in into the club. Flipkart, Paytm, Ola, Byju's and Hike are among the other names in the club.