This could be India's biggest Series A funding round

The company is likely to be valued at $450-500 million in the funding round, said one of the two people cited above, both of whom spoke on condition of anonymity.

“The documents have been signed, with only the insurance regulator’s approval pending," the second person said, adding other funds, too, will join the round, which will be primarily an equity raise.

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InsuranceDekho, operated by Girnar Insurance Brokers Pvt. Ltd, was founded in 2017. The company, led by founder and chief executive officer Ankit Agrawal, may record annualized premium collection of around ₹3,600 crore in FY23, the first person said.

“The company is looking to use the funds for geographical expansion, beef up its tech platform, hire people and expand its product portfolio," a third person aware of the company’s plans said.

InsuranceDekho reported net sales and loss of ₹47.9 crore and ₹72.2 crore in FY22 against ₹29.7 crore sales ₹46.4 crore loss the year before, according to VCCEdge.

Spokespeople for InsuranceDekho and Goldman Sachs declined to comment, while TVS Capital did not respond to a request for comment.

This is the first institutional investment in InsuranceDekho, which was internally incubated and funded by parent CarDekho.

It last raised $250 million as a part of its pre-IPO round at approximately $1.2 billion valuation.

It laid off 200 employees in August to cut costs amid a wider investment slowdown. However, the Indian used car market, currently valued at $23 billion, is projected to grow at double its current rate of expansion, at a CAGR of 19.5% till FY26-27, according to a Mint report on 22 September.

A research report by JP Morgan on 14 November on the global auto industry said the rise in car prices because of inflation and supply chain issues had resulted in a spike in used car prices. “Average prices were up by 42.5% in September 2022 versus February 2020," the report said, adding that, however, “in 2023, prices are expected to decline by 2.5% to 5% for new cars and by 10% to 20% for used cars."

CarDekho, operated by Girnar Software Pvt. Ltd, reported net sales of ₹884.3 crore in FY21 and a loss of ₹342.8 crore. FY22 financials were not available. CarDekho also said on 7 November that it is investing $100 million into its lending subsidiary Rupyy.

Multiple insuretech businesses, such as InsuranceDekho, have been in the market to raise capital. After raising $255 million in October last year at a valuation of $1.1 billion, General Atlantic–backed digital insurer Acko General Insurance Pvt. Ltd is also reportedly in the market to raise a new round.

Fairfax-backed GoDigit General Insurance Pvt. Ltd has been evaluating an initial public offering, while Renewbuy is looking to raise $100 million, Mint reported earlier. Insuretech businesses are expecting rapid growth as much of the Indian market is currently untapped.

A Redseer report in June said that digital insurance in the US stands at 14% of the population, 6% in China, and a mere 2% in India.

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