Gurgaon-based eTechAces Marketing and Consulting Pvt Ltd., the company that runs online insurance policy aggregator PolicyBazaar, is planning to raise more funds to meet its growth requirements at a time when funds are available cheaply.
The company had raised $48 million earlier this year from PremjiInvest, the personal investment vehicle of Wipro chairman Azim Premji, and existing investors Tiger Global and Ribbit Capital. The company is said to be valued at Rs 1500 crore ($235 million).
“Our previous funding was not a very big raise in today’s world. Everyone is raising a lot of money, even those at a very early stage and unproven business models,” said Yashish Dahiya, CEO, PolicyBazaar in a chat with DEALSTREETASIA. “It makes a lot of sense for us to raise $50-70 million at this time when valuations are high and raising funds is cheap, and ours is a proven business model,” he said.
This year is set to be a record year for fund-raises by venture capital funds in India. Until August, they had raised $1.4 billion in ten rounds, compared with $2.2 billion in the whole of 2014.
Dahiya founded the company in 2008, along with Avaneesh Nirjar and Alok Bansal. PolicyBazaar, its flagship product, was earlier an advertising company but switched to being a site where consumers can compare and buy various insurance policies, based on factors like price, features, claims ratios and key benefits. Its sister company PaisaBazaar has a similar model and sells loans, credit cards and mutual funds.
Dahiya said that the easy availability of funds made this a boom time, and this period of plenty will not last long. “One year down the line, only those businesses will survive that are being smart today and not burnt all their funds. They will then be able to grow and invest with the money in the bank.”
PolicyBazaar gets 24 per cent of its traffic from mobile devices, but that does not result in purchases from the same device. “Customers want to take their time to make a decision so they search and read about products on our app, but make the transaction later on a desktop,” said Dahiya, adding that he expects the company to make Rs 500 crore in revenue from insurance premiums. The business is growing at 75-100 per cent rate each year. A study by Google expects online insurance buying to be a Rs 3 lakh crore ($46 billion) industry by 2020.
PolicyBazaar had raised $20 million in a Series C round last year, from Tiger Global and Ribbit Capital, and $5 million prior to that in a round led by Inventus Capital Partners, Info Edge and Intel Capital.