SoftBank may back e-insurance aggregator PolicyBazaar at 1.6X valuation

Japanese tech conglomerate SoftBank Group is reportedly in talks with online insurance aggregator PolicyBazaar and is planning to invest in the company at a valuation of around $800 million.

According to a Bloomberg report, SoftBank is willing to take a stake in the Gurugram-based e-insurance aggregator which has already sold its 48 per cent stake to existing foreign investors, including Tiger Global Management and Temasek Holdings.

The upper limit on foreign investment can go up to 49 per cent as per the Indian government FDI rule.

However, there is no confirmation from either side. If the deal goes through, the company's valuation will jump 1.6X from $500 million when it raised the latest funding of $75 million from new investors, including True North and IDG Venture Partners in October last year. Existing investors also participated in this round.

So far, the company has secured over $180 million investment from likes of Tiger Global, Steadview Capital, Intel Capital, Temasek and Info Edge amongst others.

Also Read: Financial firm BankBazaar gets $30 Mn in Series-D round led by Experian

Yashish Dahiya, CEO, and co-founder of PolicyBazaar who declined to comment on any anticipated deal said that the FDI cap will not be a challenge as we have firm offers from domestic investors with ready capital who can balance out any foreign investment.

Dahiya who founded the IPO-bound PolicyBazaar in 2008 is an insurance comparison website run by EtechAces Marketing and Consulting Pvt. Ltd.

EtechAces which also owns and operates loans and credit cards marketplace PaisaBazaar has, till date, raised about Rs 1,000 crore including this round, largely from InfoEdge, Tiger Global Management, and Premji Invest.

The company broke even in the financial year 2016-17 with a total revenue of Rs 220 crore, up from Rs 109 crore in 2015-16, and it is readying itself for an initial public offering (IPO) by the end of 2018.

PolicyBazaar competes with Sequoia Capital-backed Bank Bazaar (A&A Dukaan Financial Services Pvt. Ltd) and new entrants such as Coverfox.

SoftBank has already shown its interest in the insurance sector. Last month, it led a $120 million investment in the New York-based home insurance startup Lemonade.