Digital insurance company Acko General Insurance on Thursday announced that it has raised $255 million in a Series D round led by General Atlantic and Multiples Private Equity. With this, it becomes the 34th unicorn this year to enter the unicorn list in 2021. This funding takes the valuation of the company to $1.1 billion.
The round also saw participation from Canada Pension Plan Investment Board and Lightspeed. Existing investors– Intact Ventures and Munich Re Ventures also marked their presence. The transaction is pending the approval of the Insurance Regulatory and Development Authority of India (Irdai).
The proceeds from the fundraiser will help the company to further invest in the healthcare vertical and scale its team, specifically in the domain of technology, product and data science.
Varun Dua, Founder and CEO of Acko said, “We will continue to scale and innovate in our flagship auto insurance business. We also continue to deepen our health strategy and intend to invest over $150 million in the health business in the near future. We believe health insurance products, claims innovation and a deeply connected ecosystem of health services that improve health outcomes for customers are today’s most urgent needs.”
This private sector general insurance company was founded in 2016 by Varun Dua and Ruchi Deepak. The company has over 70 million customers, attaining a run rate of approximately $150 million in premiums. The company stepped into the health insurance vertical last year with a key focus on the employer-employee market. By the next year, it will launch its retail health insurance product.
Shantanu Rastogi, Managing Director at General Atlantic, said, “Acko has developed a differentiated and scalable business model based on a singular customer focus, value-based pricing, highly-rated service and deep technology capabilities. We believe that Acko has the potential to emerge as an insurer-of-choice for the 100 million-strong digitally-native Indian customer base over the next decade and can play a meaningful role in shaping the future of insurance in India.”
In India, only 4.2 percent of Indians have insurance. For FY21, the Indian Brand Equity Foundation (IBEF) estimated life insurance penetration to stand at 3.2 percent and non-life insurance penetration to reach 1 percent.
However, the pandemic has given a boost to the insurance space with the crisis driving Indians to buy health and life insurance products.
“Acko has revolutionized general insurance through its D2C technology-led model, product innovation and exceptional customer experience. What stood out for us is Varun Dua’s entrepreneurial energy and superb execution over the last four years,” said Nithya Easwaran, Managing Director at Multiples Alternate Asset Management.
At present, the company also provides corporate insurance to 500,000 employees across 150 corporations. With the help of the proceeds, the company plans to scale this business to 1.5 million employees across 200 corporations in the next two quarters, Dua said.
Acko provides auto insurance and has a 2 million customer base, which it plans to double up in the next three years, Dua said.
Amazon, Accel, Elevation, Ascent Capital, Intact Ventures, Munich Re Ventures and Flipkart co-founder Binny Bansal are also some of the other investors who poured in funds in the Tech-insurance company.