Policybazaar, one of India’s leading online insurance marketplaces, has filed for an IPO that may raise up to Rs 6,018 crore rupees ($809 million), helping the firm join the bandwagon of growing number of businesses that are looking to raise funds in India's growing digital economy.
Policybazaar, backed by Tiger Global Management and Tencent Holdings Ltd., was created in 2008 to address the country's massive under-insured population. It joins the ongoing investment drive in India which augmented after Zomato Ltd.'s July launch drew an ecstatic response from investors, who have since driven the company's stock up by approximately 80%.
According to a public notice issued recently, the SoftBank Group Corp.-backed firm (Policybazaar) has filed preliminary filings with the market regulator to raise around $504 million (Rs 3,750 crore) through the sale of new shares.
Existing owners will sell shares valued up to $305 million (Rs 2,268 crore). In addition, PB Fintech Pvt., the startup's parent company, has suggested it may seek a pre-IPO equity offering of about $101 million (Rs 750 crore).
Policybazaar allows consumers to compare pricing and features of life, health, travel, vehicle, and property insurance products from hundreds of companies. As a result, customers avoid traditional brokers or mediators, who often promote incentive-based policies.
Its customer service representatives assist customers in filing claims, redeeming paybacks, and changing rules. The company's founder and CEO, Yashish Dahiya, stated last year that Indians had a desperate need for insurance coverage as part of the company's IPO aspirations.
He claims that despite the prevalence of chronic conditions such as diabetes and high blood pressure, most middle-class Indians have not set up appropriate health insurance or purchased life insurance.
Policybazaar competes in a crowded market. Fintech startups such as Acko General Insurance, backed by Amazon.com Inc., and Paytm parent One97 Communications Ltd., are vying to break state-backed insurers' stranglehold on the highly regulated financial services industry.