Peak XV-backed digital banking startup Freo said it has secured corporate agent licence from Insurance Regulatory and Development Authority (Irdai)–a move that will help the fintech offer insurance products on its platform, alongside UPI, savings and credit products.
“Our strategy focuses on offering highly personalised and affordable insurance products that are simple to understand and tailored to users’ specific needs, such as coverage for women’s health, cyber fraud protection, and common diseases,” said Kunal Varma, its CEO and co-founder, told FE.
The insurance penetration in India stands at around 4.2%, compared to the global average of 7%, showing that a large part of the population remains uninsured or underinsured, the company said in a statement, adding that this gap is partly due to the mass perception that insurance is complex and only necessary for health or life coverage.
Varma added that Freo also plans to introduce more comprehensive investment solutions, such as mutual funds and other savings cum investment instruments going ahead. Not just Freo, most new-age fintechs rely on cross-selling financial products to scale their operations and allow their users to use one platform for all financial needs.
A corporate agent license allows an entity or a person to solicitate and service insurance products for any of the specified category of life, general and health. Currently, the company has three main verticals – Freo Pay, Save and Credit. Freo Pay offers products such as UPI payments, bill payments and co-branded credit cards with Yes Bank, Freo Save offers customers savings accounts in partnership with Equitas Small Finance Bank. Meanwhile, Freo Credit, formerly known as MoneyTap, offers loans in partnership with Incred Capital, Kisetsu Saison Finance (India), Cholamandalam Investment and Finance and more.
In February, the startup raised debt funding of an undisclosed amount from Small Industries Development Bank of India (Sidbi)- the first fintech investment made by the bank. In FY24, it generated 99.5 crore in revenue from operations, 8% more than that in FY23, while net loss narrowed to 14.2 crore from Rs 39.9 crore a year ago. The company also turned profitable in December 2023.
