Online Insurance: PolicyBazaar in talks to raise new funds at $2 billion valuation


Online insurance platform PolicyBazaar is in talks to bring on board Alpha Wave Incubation (AWI), an early-stage fund managed by Falcon Edge and anchored by ADQ, a holding company owned by the Abu Dhabi government, for an investment in the range of $50-100 million, multiple people familiar with the development told ET.

The new funding, which is a mix of secondary and primary capital, is expected to value PolicyBazaar’s parent, ETechAces Marketing and Consulting, at $2 billion up from about $1.5 billion that it previously commanded, sources said. ETechAces also operates the online lending marketplace PaisaBazaar.

In a secondary transaction, AWI has already acquired shares worth $20 million in the financial technology firm from an existing investor– True North, a private equity fund. The primary funding is yet to be finalised.

“Falcon Edge has bought stakes from some existing investors and is in the process of being issued fresh equity in the company,” said a person with direct knowledge of the development.

Yashish Dahiya, cofounder & group CEO, PolicyBazaar, confirmed the secondary sale of shares by True North however, he did not comment on the primary capital infusion by AWI.

Emailed queries sent to Falcon Edge’s cofounder Navroz Udwadia and True North did not elicit a response till press time Sunday.

On October 30, True North, formerly known as India Value Fund, announced in a press statement that it had clocked a partial exit from PolicyBazaar. It did not divulge any other financial details of the transaction. Prior to the stake sale, True North held a 3.31% stake in the company through Fund V and 2.48% through Fund VI.

Dahiya told ET that the UAE is among the top geographies where the fintech firm is looking to expand operations. The partnership with AWI is in that direction, he said.

“ Our revenue will be Rs 1,000 crore for financial year 2020-21.. and while PolicyBazaar will be profitable the overall company will still have about $5 million of losses..” he said. Dahiya said it would be “speculative to comment” on any IPO plan as “ nothing is board approved.”

“ We are keen on international expansion and homegrown Indian companies must test international areas as part of Atmanirbhar Bharat. It’s great our companies get to a stage where they can help customers abroad…,” he said.

AWI, which manages a $300 million India-focused fund helps companies and founders from India and Southeast Asia set up a second headquarter in Abu Dhabi, and in some cases, the region acts as a base to launch operations in the Middle East and North Africa. The fund’s holding company ADQ aims to spur technology-led entrepreneurship in the region.

PolicyBazaar had also executed another round of secondary share sale of shares a few months ago when SoftBank Vision Fund, an existing backer, bought stakes from older investors including Tiger Global, Tiger Global Management, Ribbit Capital and Inventus Capital. At the time, PolicyBazaar was valued at $1.5 billion. The company also counts China’s Tencent, InfoEdge, Chiratae Ventures, Inventus Capital, Premji Invest and Temasek as investors.

The company offers pure term, investment-linked, health and auto insurance. It claims nearly 10 lakh transactions a month, accounting for nearly 25% of India’s life cover, and over 7% of India’s retail health insurance business.

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