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Digital insurance provider Acko General Insurance is close to raising $100-150 million (around 820-1,200 crore) from new and existing investors, two people aware of the development said.

After lengthy discussions on valuation, existing investors Canada Pension Plan Investment Board (CPPIB), General Atlantic (GA) and Multiples Private Equity agreed to bring in more capital in a likely Series E round, the people cited above said seeking anonymity.

“While General Atlantic demanded to invest at around flat valuation, other existing investors pressed to negotiate higher. The new round is likely to fetch a slight premium over its previous round ($1.1 billion) after several negotiations among its existing investors, which delayed the fundraising. It is now awaiting regulatory approvals from the Competition Commission of India (CCI) and is set to close the round in the next 35-40 days," one of the two people said.

While the latest round is significantly higher than the previous one, it may not be at the expected valuation of over $2 billion as some publications reported.

An Entrackr report said that Prosus (formerly Naspers) was in talks to lead the funding round in the Bengaluru-based insurtech startup, but this could not be independently confirmed. Emails sent to General Atlantic and Multiples PE remained unanswered till press time. While CPP Investments declined to comment, Prosus said, “We do not comment on market rumours or speculations."

When contacted, Varun Dua, founder and CEO of Acko General Insurance, did not identify the names of investors, funding amount or valuation but confirmed the fundraising, attributing the delay to regulatory approvals.

In October 2021, Acko became India’s 34th startup to become a unicorn (a private firm with a valuation of $1 billion and above) after raising $255 million in a Series D round led by General Atlantic and Multiples PE at a valuation of $1.1 billion. CPPIB and Lightspeed Growth also participated in the round, along with existing investors Intact Ventures and Munich Re Ventures.

Acko’s early investors include Amazon India, Accel, Elevation Capital (formerly SAIF Partners), Ascent Capital, Flipkart co-founder Binny Bansal, Infosys co-founder N.R. Narayana Murthy’s Catamaran Ventures and Infosys co-founder Kris Gopalakrishnan.

Founded in 2016 by Dua and Ruchi Deepak, Acko General Insurance operates as a subsidiary of Acko Technology and Services Pvt. Ltd. The company owns and operates the digital insurance portal Acko.com to offer services such as car insurance, motor insurance comparison, third-party and comprehensive insurance, premium calculator and claims for cars and two-wheelers. It also provides insurance products for health and electronics.

The online insurer sells its products directly to consumers digitally without involving insurance agents used by traditional insurance firms.

Acko General Insurance more than doubled revenue to 1,087.5 crore in FY22 from 475.3 crore in the previous fiscal year, most of it driven by the sale of health insurance products. However, the insurtech startup’s loss widened to 382 crore in FY22 from 132.5 crore from a year ago.

In 2022, overall equity fundraising by insurtech startups fell 39% to around $534.2 million from $880.8 million in 2021, showed data from researcher Tracxn. However, this year may mark a revival as more entities besides Acko are already in talks with investors to raise capital.

ABOUT THE AUTHOR

Beena Parmar

Been Parmar is a financial journalist based in Mumbai. She has reported on the banking and finance sector for over 10 years. She now writes on the alternative investment ecosystem from India - private equity, venture capital and especially startups. She loves to read about politics, society and humane stories.
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