A growing number of FinTechs have launched in recent years with the aim of bringing financial services to India. One of the biggest concerns in the country is the lack of insurance: As of 2017, just 3.69 percent of India’s population have insurance coverage, and less than a fourth of the 45 million who currently subscribe to an individual health plan are adequately covered for chronic diseases.
One of the country’s most successful FinTech startups—online insurance platform Policybazaar—aims to bring its services to a large population of the country’s under-insured or non-insured. The company, which counts SoftBank Group Corp.’s Vision Fund, Tiger Global Management, and Tencent Holdings Ltd as some of its biggest backers, helps sell about a million policies a month, allowing users to compare life, health, auto, travel, and property policies from 40 insurers on its website. In addition, Policybazaar’s customer service reps help users settle claims, redeem paybacks, and amend policies, while the company’s Paisabazaar facilitates loans and credit cards, and sells mutual funds.
Over the last year, Policybazaar has seen between 70 percent and 100 percent growth, depending on the insurance product, and the company expects to post a marginal profit during 2020-21. Now it has announced plans for an IPO in 2021 at a valuation of more than $3.5 billion. If that happens, Policybazaar would be the first of India’s mega-startups to go public.
As a first step, Policybazaar aims to secure about $250 million in a round of financing at a $2 billion-plus valuation before a September 2021 IPO. The startup is now selecting two to three IPO lead underwriters from a roster that includes several Wall Street banks.
“The IPO size will be about $500 million,” said co-founder Yashish Dahiya “We have global interest and will raise in the coming weeks.”
SoftBank and Singaporean state investment firm Temasek Holdings Pte each hold about a 15 percent stake in Policybazaar, while Tencent and Tiger Global have about 10 and 8 percent, respectively.
India currently prohibits companies from listing in other countries at the same time. However, the government is reportedly working on changing those regulations. If so, Dahiya said he’ll consider a dual listing. But for now, Policybazaar plans to only list in Mumbai.