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Exclusive: Acko in talks to raise new round at over $2 Bn valuation

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Digital insurance company Acko is in late-stage discussions to raise a new round from new and existing investors with over 2X premium in its valuation, said three people aware of the details of the potential deal. 

“Prosus [formerly Naspers] has been in talks with Acko for the past few months to lead a new funding round,” said one of the sources requesting anonymity. “The talks have reached final stages and Prosus is likely to lead over $200 million in the new round.”

This would be the maiden round for the Bengaluru-based firm in 2022. Acko had raised $255 million led by General Atlantic and Multiples Private Equity at a valuation of $1.1 billion in October last year. It has raised $450 million to date and also counts Amazon, Accel Partners, Catamaran Ventures, Elevation Capital, RPS Ventures, and Binny Bansal as its investors.

According to sources, the company will be valued in the range of $2-2.3 billion. “Automobiles is the largest category for Acko but the company’s growth in gadgets and corporate health insurance have made Acko attractive to investors,” said the second the above-quoted source.

Acko’s co-founder and chief executive officer (CEO) Varun Dua declined to comment on the story. Queries sent to Prosus didn’t elicit any immediate response. We will update the story as and when they respond.

Unlike traditional insurance firms, Acko sells directly to the consumer and passes on the benefit of middlemen cost to the consumers. The company had launched individual and group health insurance early this year.

Besides motor and health insurance, Acko also partnered with leading Indian companies like Amazon, Ola, MakeMyTrip, Zomato, OYO, RedBus to offer trip insurance, electronics cover and hotel-stay insurance. During the last fundraise, Acko also said that it has amassed over 70 million customers.

The company’s direct competitor Digit Insurance became the first unicorn of 2021 and is currently valued at $4 billion, as per Fintrackr’s estimates.

While Acko is yet to file its annual financial report for FY22, the company posted operating revenue of Rs 209 crore in FY21 as compared to Rs 195 crore in the preceding fiscal year. The company managed to control its losses to Rs 132.5 crore in FY21 from Rs 188 crore in FY20.

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