India’s largest online payment platform Paytm is in talks to obtain Coverfox in an all-cash deal, reported Economic Times.
If the deal goes through, Paytm would be spending around $100-120 million (over Rs 700 crore) in cash for the transaction. This would be the largest acquisition deal for the digital payment giant, two persons aware of the matter told ET.
Paytm is an Indian e-commerce payment system and digital wallet company, based out of Noida. It was founded in August 2010 by Vijay Shekhar Sharma with an initial investment of $2 million.
It started off as a prepaid mobile and DTH recharge platform, and later added data card, postpaid mobile and landline bill payments in 2013.
Where as, Coverfox is a Mumbai-based insurance marketplace, founded by Varun Dua and Virendra Rane in 2013. Coverfox offers both life and non-life insurance policies. It has 50,000 agents and offers products from 45 insurance companies.
The company sold premiums worth $100 million through its platform and generated $22 million in revenue with a million transactions done last year.
On the other hand, if the deal between the two varied digital platforms went through, then it would see Paytm emerging as a direct competitor to the country’s largest online insurance marketplace PolicyBazaar.
Significantly, SoftBank Vision Fund, a large investor in Paytm’s parent One97 Communications, is also a significant shareholder in Policybazaar, which may pose challenges to the deal, people close to the development told ET.
Overall, Coverfox has raised worth $40 million in capital and counts SAIF Partners, Accel Partners, NR Narayana Murthy’s Catamaran Ventures and International Finance Corporation among its investors.
These shareholders are expected to get an exit if the deal takes place. SAIF is a common investor in Paytm and Coverfox.