Acko, an Indian insurance policy provider, is the latest Indian startup that has become a unicorn. It joins nearly three dozen other companies in the second-largest global internet market who have achieved the coveted status.
The Bangalore-headquartered startup said it has raised $255 million in a new financing round, bringing its all-time raise to $450 million. General Atlantic and Multiples Private Equity led the new financing round. It is still subject to approval by the country's insurance regulator.
CPPIB, Canada's largest pension fund, Lightspeed Growth, and existing investors Intact Ventures, Munich Re Ventures, also participated in this round. The startup, which has been around for five years, is now valued at $1.1 Billion, an increase of $500 million from last year.
Acko, a digital-first company, is trying to disrupt the country's outdated insurance industry. It develops and sells bite-sized auto insurance products (aimed at drivers and others in transportation-related scenarios), healthcare protections to employers, as well as protection on gadgets.
The startup has distributor partners with many firms, including Amazon, an existing investor in Acko. Also, MakeMyTrip is a travel and hotel booking platform, Ola, Bajaj Finance, Urban Company, and insurance giant Bajaj Finance.
Acko has partnered with Swiggy, Zomato and other food delivery companies to cover nearly one million gig workers across the country. Acko boasts over 70 million customers, and a premium run rate of $175 millions.
Indian firms need to offer a wide range of small-sized insurance policies. A small fraction of India's 1.3 billion inhabitants have insurance coverage, and many cannot afford large policies.
According to ICRA rating agency, less than 3% of Indians had access to insurance products as of 2017. According to the World Bank, an Indian average earns about $2,100 per year. According to ICRA, the average Indian who purchased an insurance product spent less than $50 in 2017.
ACKO has redesigned the protection category for consumers, and intends to keep innovating in this space. Varun Dua, chief executive of Acko, stated that we believe in helping our customers protect their valuable assets and the safety and health of their loved ones through a differentiated product or value-added service.
Insurance and protection should be tailored to each person's needs and in a seamless and reliable manner. We are delighted to work with trusted investors who have deep knowledge of the regulatory environment as well as first-hand experience working with high-growth, innovative companies.
The startup stated that it will use the capital to expand its healthcare offerings, and to hire more people in technology, product, and data science positions.
We are also continuing to improve our health strategy. In the near future, we plan to invest more than $150 million in the business. Today's greatest needs are for health insurance products, claims innovation, and an ecosystem of health services that can improve customer health outcomes.
This funding comes at a moment when many Indian startups are raising record capital at an unparalleled pace in India. Cross-border payments startup Zolve and agritech firm DeHaat, Fintech Groww and Edtech Teachmint all announced their new funding rounds this week. TechCrunch earlier reported that Tiger Global, Falcon Edge Capital and DeHaat are in advanced stages in talks to create another unicorn in India (DealShare).
Policybazaar will launch its initial public offering next week. It competes with Acko. The startup hopes to raise more than $800 million through the IPO.
