Indian online insurance aggregator PolicyBazaar has applied for an initial public offering in which it is seeking to raise $809 million, becoming the fourth startup to explore public markets from the South Asian market in the past two months.
In papers submitted to the market regulator in India, PolicyBazaar said it is looking to raise $504 million by issuing new shares, while the rest will be driven by the sale of shares by existing investors. Local media reports said the startup is considering a valuation of up to $6 billion.
The 12-year-old startup, backed by SoftBank, Falcon Edge Capital, Tiger Global and InfoEdge, said it may consider raising around $100 million in a pre-IPO round.
PolicyBazaar acts as an aggregator that allows users to compare and buy policies – including life, health, travel, auto and property – from dozens of insurers on its website without having to go through traditional agents. It works in India as well as in the Middle East.
In India, only a fraction of the country’s 1.3 billion people currently have access to insurance, and some analysts say digital firms could be instrumental in bringing these services to the masses. According to rating agency ICRA, insurance products reached less than 3% of the population by 2017.
According to the World Bank, an average Indian earns around $2,100 a year. ICRA estimates that Indians who bought an insurance product were spending less than $50 on it in 2017.
In a report earlier this year, analysts at Bernstein estimated that PolicyBazaar holds a 90% share of the online insurance delivery market. The platform, which competes with Acko as well as Amazon in India, also sells loans, credit cards and mutual funds. The startup says that it sells over one million policies a month.
“India has a low-penetration insurance market. Within the under-penetrated landscape, digital distribution through web-aggregators like PolicyBazaar constitutes <1% of the industry. This provides a huge headroom for growth,” Bernstein analysts wrote to clients.
Zomato, which made a grand public debut last month, as well as fintech firms Paytm and MobiKwik, have filed for their initial public offering in recent weeks.