Insurance policy provider Acko is the latest Indian startup to become a unicorn, joining nearly three dozen other companies in the world’s second largest internet market that have achieved coveted status this year.
The Bangalore-based start-up said it raised $ 255 million in a new round of funding, bringing its all-time raise to $ 450 million. The new round table, which is subject to the approval of the country’s insurance regulator, was led by General Atlantic and Multiples Private Equity.
CPPIB, Canada’s largest pension fund and Lightspeed Growth along with existing investors Intact Ventures and Munich Re Ventures also participated in the round, which values the five-year startup at $ 1.1 billion, up from $ 500. million dollars a year ago.
Acko is trying to tackle the country’s archaic insurance industry with a digital-first product. It develops and sells small-scale auto insurance products (for drivers and others in transportation-related scenarios), healthcare coverage for employers, as well as coverage on gadgets.
The startup has channel partners with a number of companies, including Amazon, which is an existing investor in Acko, as well as travel and hotel booking platform MakeMyTrip, ridesharing company Ola, the travel giant. Bajaj Finance and Urban Company insurance.
Acko covers nearly a million workers nationwide through partnerships with companies such as food delivery giants Swiggy and Zomato. Overall, Acko has racked up over 70 million customers and has an execution rate of $ 175 million in premiums.
Offering a large catalog of small size insurance policies is crucial for businesses in India. Only a fraction of the country’s 1.3 billion people currently have access to insurance, and most cannot afford large policies.
According to the rating agency ICRA, insurance products had reached less than 3% of the population in 2017. The average Indian earns about $ 2,100 a year, according to the World Bank. CIFAR estimated that among Indians who purchased an insurance product, they spent less than $ 50 on it in 2017.
“ACKO has significantly redefined the category of consumer protection and plans to continue innovating in the space. We firmly believe in helping our clients protect their valuable assets or the health and safety of their loved ones through a differentiated product and value-added service, ”said Acko Founder and CEO Varun Dua.
“Insurance and protection must work for people based on their unique risks and needs in a transparent and reliable manner. We are delighted to partner with trusted investors who have a deep understanding of the regulatory environment and bring first-hand experience working with innovative, high growth companies. “
The startup said it plans to deploy new capital to expand its healthcare offering and hire more talent in tech, product and data science.
“We also continue to deepen our healthcare strategy and intend to invest more than $ 150 million in the healthcare sector in the near future. We believe health insurance products, claims innovation, and a deeply connected healthcare ecosystem that improve health outcomes for clients are the most pressing needs today.
The funding comes at a time when dozens of Indian startups are raising record capital at an unprecedented rate in India. Just this week, cross-border payments start-up Zolve, agro-tech company DeHaat, fintech Groww and edtech Teachmint unveiled their new rounds of funding. TechCrunch reported earlier this week that Tiger Global and Falcon Edge Capital are at an advanced stage of talks to hit another unicorn in India (DealShare).
Policybazaar, which competes with Acko, will open its initial public offering next week. The startup is looking to raise more than $ 800 million during the IPO.