General Atlantic is doubling down on its bet on the Indian insurtech at a time when most investors are cautious.
The New York-headquartered growth equity investor is positioning to lead a new financing round of about $100 million in the Indian startup. According to one of the sources, the new round is likely to move ahead at a valuation of roughly the same as the previous round.
The investment hasn't closed, so the terms of the deal could change.
One of the sources said that the new deliberations follow an engagement with PayU earlier this year to raise over $200 million. It is not clear why those talks did not go through. The Economic Times reported that PayU had offered a term sheet.
Lightspeed Venture Partners India, Amazon and Multiples Private Equity are among the existing backers of the startup that is trying to take on the insurance industry with a digital-first product. Bite-sized auto insurance products, healthcare protections to employers, and protection on gadgets are some of the things it develops and sells.
The startup has distribution partners with a number of firms including Amazon, which is an existing investor in Acko.
A year ago, the company said it covers nearly a million gig workers through partnerships with companies.
Firms in India need to offer a large catalog of insurance policies. Most of the nation's 1.3 billion people can't afford large insurance policies. Insurance products made up less than 3% of the population. The average Indian makes $2,100 a year. ICRA estimated that Indians who had purchased an insurance product would spend less than $50 on it in a year.
The dealflow activity has taken a severe hit in the South Asian market as investors grow cautious of writing new checks after valuations of publicly listed firms take a tumble.
According to Tracxn, Indian startups raised $3 billion in the third quarter, down from the previous quarter and year-over-year.
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