PE players target India’s insurtech Digit

December 11 2019 by Yvonne Lau

Indian insurtech start-up, Digit Insurance, is in advanced discussions with private equity (PE) players for a fundraising round set at US$80 to US$100 million, according to a Times of India report.

TVS Capital Funds, A91 Partners and Faering Capital are the PE firms in conversation with Digit – the P&C insurer’s first external financing round. Canada’s Fairfax Holdings is an existing investor – the firm has already invested US$95 million.

The deal awaits regulatory approval, but once finalised, will bring Digit’s valuation to between US$800 million to US$900 million. The fresh funds will go towards investment in new product lines and expanding its in-country distribution network.

Digit Insurance was co-founded by Kamesh Goyal, a seasoned executive who has spent most of his career with Allianz in India and Germany. Co-founder Prem Watsa, is chairman of Fairfax Holdings, which entered the Indian market in 2001 through a JV with ICICI bank.

In only two years of operations, with products across motor, travel and personal, Digit now holds a 1% Indian market share, five million customers and 100,000 paid claims. It has partnered up with domestic start-ups to the tune of e-commerce giant Flipkart and digital payment player Paytm.

The general insurance start-up is amongst a host of new Indian insurtechs looking to tap into the potential of a digital-savvy and under-insured nation – digital insurance penetration in the country sits at less than 4%. Amazon-backed Acko raised US$16 million just last week and Tencent took a 10% stake in India’s Policybazaar worth US$150 million in November.

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