PolicyBazaar becomes India’s latest unicorn after Softbank investment

• The insurance policy portal received $238 million in a funding round led by Softbank.
  
• The deal involved the sale of a 20% stake in PolicyBazaar.
  
• PolicyBazaar will use the funds to achieve its growth and acquisition targets. It plans to reach 10 million customers by 2020.

Swiggy had barely settled into its spot on the list of India’s newest unicorns and it’s already been unseated by PolicyBazaar. The online aggregator, which helps consumers compare different insurance policies, has received a $238 million investment in a funding round led by Japanese tech giant Softbank, facilitated through its Vision Fund.

Softbank is no stranger to India’s technology sector, becoming something of a unicorn-builder with investments in Paytm, Flipkart and OYO Rooms.

The funding round involved the sale of over a 20% stake in PolicyBazaar by its owner, ETechAces Marketing and Consulting. As part of the investment, Softbank took a 14% stake in PolicyBazaar for around $150 million. EtechAces also owns PaisaBazaar, which compares different loans and credit card rates from banks.

Reports first surfaced in January 2018 that Softbank was in talks to invest in PolicyBazaar. At the time, the funding round was said to value the portal at around $800 million.

A company with big plans

Founded in 2008 by three IIT alumni, PolicyBazaar nullifies the role of agents and intermediaries by allowing consumers to pick and choose between different policies from all of India’s major insurers. It reportedly earned close to ₹20 billion in revenue in fiscal 2018 and currently has around 300,000 transactions per month.

As insurance penetration in India increases and the ecosystem develops, PolicyBazaar will be of great help to millions of people looking to purchase a policy online. It is looking to reach 10 million customers by 2020 and is also planning to expand into the healthcare consultation space.

Prior to the latest funding round, PolicyBazaar had raised around ₹10 billion from investors, having reportedly earmarked ₹5 billion for acquisitions and growth initiatives, particularly in the reinsurance space. Reinsurance involves insurance for insurance companies.

In December 2017, it was said to be mulling an initial public offering (IPO) as part of a plan to triple its valuation from $500 million. Following the Softbank investment, it still maintains that it will go public in the near future. A decision on an IPO is expected by September 2018.