Zopper raises $75 million to solve India’s insurance problem

For greater than half a decade, Zopper constructed a platform for small and medium-sized companies, serving to retailers with invoicing and funds via its point-of-sale platform. It offered that IP to PhonePe in mid-2018, however as an alternative of becoming a member of the fintech large, Zopper has been engaged on a brand new enterprise from scratch and unbiased of PhonePe. That business, an API platform for insurance infrastructure, mentioned on Tuesday it has raised $75 million in new funding.

The New Delhi-headquartered startup’s Series C funding was led by Creaegis. ICICI Venture and Bessemer Venture Partners in addition to current backer Blume Ventures additionally participated within the funding, the startup mentioned. Zopper, an 11-year-old startup, has raised $96 million to date. It didn’t disclose the valuation at which it closed the spherical.

Zopper works with insurance suppliers and creates byte-sized, personalised merchandise that it then provides to distribution companions. This strategy differentiates Zopper from lots of its opponents in India which are aggregating coverages from totally different producers and trying to minimize the distributors and straight attain shoppers.

“If you look at the penetration of insurance in India today, it’s just 3 to 4%,” mentioned Surjendu Kuila, founder and chief government of Zopper, in an interview. “If you’re trying to bring new people to the fold of insurance, you just cannot sell them schemes that are priced above $37 to $50 a year.”

Offering clients slivers of insurance coverages in smaller sachets, too, hasn’t confirmed profitable as a result of there’s no margin for anybody to make cash, he mentioned.

Zopper is trying to solve this by partnering with banks, non-banking monetary establishments, retail chains, mobility companies that have already got a captive customerbase. “These partners need an insurance platform, and that’s what we provide,” he mentioned.

Kuila claimed that no different agency is taking this strategy and therefore has not been in a position to decrease their value of buyer acquisition. “That’s the reason why even Policybazaar [online insurance aggregator that became a public company last year] is not profitable,” he mentioned. Zopper, in distinction, has been worthwhile for over 18 months, he mentioned.

“Our thesis from the early days has been clear: There’s already an infrastructure. Somebody has poured capital expenditure to build that infrastructure. So why don’t we then use technology to streamline that instead of creating everything from scratch,” he mentioned.

Zopper at present has presence in over 1,200 Indian cities and has partnered with over 150 gamers within the trade together with retail group Amazon, ride-hailing startup Ola, retail chain Croma, phonemaker Xiaomi, Japanese conglomerate Hitachi, and Equitas Small Finance Bank.

“We truly believe in Zopper’s vision of transforming and automating the insurance distribution model in India. Over the years, they have demonstrated their tech and product innovation value to their ecosystem partners and insurers,” mentioned Prakash Parthasarathy, Managing Partner at Creaegis, in an announcement.

“All this has been achieved in a very capital efficient manner and our investment will help its accomplished management team led by Surjendu and Mayank to scale and improve access to a wider customer base. We are privileged to be their partner and we are committed to support their journey given our experience in this space.”

The startup plans to deploy the recent funds to considerably scale its workforce and likewise discover alternatives to purchase smaller startups, Kuila mentioned. It’s in no hurry to go public. He mentioned Zopper is initially aiming to first attain practically $1 billion in income and over the course of about 5 years it is going to file for an preliminary public providing.

The startup’s sale of its earlier business to PhonePe was misreported by many as its acquisition by some information organizations. Kuila mentioned PhonePe by no means held any stake in Zopper and the startup, which counts Tiger Global amongst its backers, continues to be supported by its early backers and new buyers.

“Given ICICI Venture’s successful investment track record in the Insurance sector, we think Zopper is well positioned to capture this long-term growth opportunity,” mentioned Gagandeep S Chhina, Director of Private Equity at ICICI Venture, a agency that started investing in native companies over 30 years in the past. “We are excited to support the management team’s vision to establish Zopper as a leading Insurtech player with its scalable technology, multiple insurer tie-ups and partnerships with distribution channels across sectors.”