Digital insurance start-up Acko on Thursday announced a $255-million (Rs 1,911.13 crore) Series D fundraise led by New York-based growth capital investor General Atlantic and Multiples Private Equity.
The round pegged Bengaluru-based Acko’s valuation at $1.1 billion (Rs 8,244.11 crore), making it the 34th unicorn in the growing list of billion-dollar tech start-ups in the country. The transaction is subject to approval by the country’s insurance regulator, Irdai.
The round also included participation from Canada Pension Plan Investment Board and Lightspeed, as well as existing investors, Intact Ventures and Munich Re Ventures. Barclays was the exclusive financial adviser to Acko on this fundraise.
Acko’s total fundraise now stands at $450 million. Previously, Acko had raised capital from investors, including Amazon, Accel, Elevation, Ascent Capital, Intact Ventures, Munich Re Ventures and Flipkart’s co-founder Binny Bansal, among others.
Acko is a direct-to-consumer auto insurance provider which offers products like mobility and gadget insurance through tie-ups with large e-commerce platforms like Amazon, MakeMyTrip, Ola, Urban Company, Bajaj Finance and others. In addition, Acko covers nearly a million gig workers in the country through partnerships with companies including Zomato and Swiggy for health insurance.
Last year, Acko entered the under-penetrated health insurance vertical with a differentiated proposition focused on the employer-employee market. Its flagship retail health insurance product is due to launch by early next year.
Founded in 2016 by Varun Dua and Ruchi Deepak, Acko has over 70 million customers, clocking a run-rate of approximately $150 million in premiums. Acko’s founder and CEO Dua said the start-up will continue to deepen its expansion into health insurance with plans to invest over $150 million into the segment.
“We have succeeded on the auto front and will continue to scale and innovate in our flagship auto insurance business. 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,” he added.
Digital insurance space has emerged as one of the most funded segments in the start-up sector, especially after the government increased the foreign direct investment (FDI) limit from 49% to 74% in insurance companies.
Acko competes with other insuretech start-ups such as Digit Insurance which recently raised $200 million at a $3.5-billion valuation in July 2021, and Policybazaar which is headed towards a Rs 6,000-crore IPO. Apart from this, IPO-bound Paytm’s insuretech unit on Wednesday raised Rs 920 crore from Swiss Re in exchange for a 23% stake.
“With its data-led direct to consumer model, cost leadership in claims fulfilment, and customer-first DNA, Acko has crafted a new paradigm for technology-led, hassle-free insurance in the Indian market across auto and microinsurance. As a result, the company is in a unique position to leverage this deep technology focus to drive inroads in health and other insurance verticals. Acko is redefining how insurance is experienced in India,” Aditya Sharma, partner – growth equity, Lightspeed, said in a statement.