1 min read.Updated: 12 Feb 2019, 02:05 AM ISTAlok Mittal
Regulatory uncertainty surrounding web-based marketing platforms in insurance seemed as a deterrent for Policybazaar
Policybazaar's their early campaign around 'Ullu Mat Bannaa' was controversial, but broke the clutter
Venture capital investments often rely on the hockey-stick phenomenon: a startup initially invests in building the infrastructure and attaining the product-market fit. And then, boom! You sell and collect, scale like a hockey stick.
Investments that don’t fit this world view are often regarded as more conventional businesses, which may take too long to deliver venture-style returns. I, as part of Canaan Partners, missed seeing that hockey stick at Policybazaar.
Yashish (Dahiya) is an old friend from IIT, and we had early access to his plans when he was starting Policybazaar. However, the delivery model continued to have significant friction, and seemed like a barrier to scale. Besides, insurers were investing heavily in their own direct businesses, which could compete with Policybazaar’s intermediation model. Finally, there was regulatory uncertainty surrounding web-based marketing platforms in insurance. I did not pursue Yashish aggressively and frittered away the relationship advantage. With the benefit of hindsight, Policybazaar build a great business.
First, they embraced the delivery friction (“it is what it is") and executed well to ensure it becomes a competitive advantage rather than a scale limiter. Second, they invested smartly in brand building—their early campaign around “Ullu mat bannaa" was controversial, but broke the clutter. Finally, they were able to tweak their business model with agility as the regulations evolved.
These factors ensured they thrived. Now, they are riding the second wave of value creation through extensive data that they have access to. They have also established a lead in lending aggregation through the Paisabazaar brand. As an investor, I feel great to be proven wrong on my passes. And that too by a friend—priceless!
PS: After I left Canaan, Yashish did allow me to write a small personal cheque to Policybazaar.
Alok Mittal is co-founder, Indifi Technologies and Indian Angel Network.