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BENGALURU : Acko became India’s latest unicorn after the digital insurer raised $255 million at a valuation of $1.1 billion in a fundraising round led by private equity firms General Atlantic and Multiples Private Equity.

Canada Pension Plan Investment Board and Lightspeed Growth also took part in the fundraising along with existing investors Intact Ventures and Munich Re Ventures, Acko said in a statement on Wednesday. The transaction is subject to approval by the Insurance Regulatory and Development Authority of India (Irdai).

The five-year-old startup plans to use the capital to grow its auto insurance vertical besides micro-insurance products across travel, gadgets and appliances, which together contribute nearly 80% of its total premiums, according to the company. It will also invest in growing its year-old health insurance vertical, which contributes nearly 20% of its total premiums.

Meanwhile, Acko will look to raise another round of funding in the coming months for expansion into new verticals, founder and chief executive Varun Dua said in an interview separately.

“Almost $100-150 million of our fundraising will go into scaling our recently launched health insurance offerings. We want to ensure that Acko becomes the protection destination for users looking to buy insurance products. While we had the option from investors to raise an even larger round (at a higher valuation), we believe the present valuation is in pace with our current business," he said.

Amazon India, Accel, Elevation, Ascent Capital and Flipkart co-founder Binny Bansal are the other investors in Acko.

With the latest infusion, Acko has raised a total of about $450 million.

Dua said Acko may acquire 1-2 insurance businesses over the next year in a bid to strengthen its product service integrations with more primary care providers and across garages and workshops for the auto insurance vertical. So far, more than 70 million users have bought insurance products from the company, he said.

Acko is the 34th domestic company this year to enter India’s growing list of unicorns or a privately held startup valued at $1 billion or more.

It is also the second insurtech startup to achieve the milestone this year. Acko’s rival, Digit Insurance, entered the club of unicorns in January and doubled its valuation to $3.5 billion in subsequent funding rounds by July.

Acko sells its products online across car, bike, travel, gadgets and health insurance. It also partners with Amazon, MakeMyTrip, Ola, Urban Company to distribute its products.

The company also provides corporate insurance to 500,000 employees across 150 corporations at present. With the fundraising, the company plans to scale this business to 1.5 million employees across 200 corporations in the next six months, Dua said.

Acko’s auto insurance vertical currently has close to 2 million customers, which it plans to double over the next three years, Dua said, adding that the company is targeting gross premiums worth 1,200 crore ($160 million) by December end, which will be more than double of last year’s 450 crore.

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