InsuranceDekho and RenewBuy to take on PolicyBazaar with potential merger

InsuranceDekho and RenewBuy, two major players in India's insurance market, are on the cusp of a merger. This strategic move aims to create a significant entity in the insurance aggregation space and take on industry leader PolicyBazaar directly.

The combined entity is estimated to be valued at over Rs 8,000 crore ($950 million), with RenewBuy valued at around Rs 3,000 crore and InsuranceDekho at over Rs 5,000 crore. This merger is anticipated to establish the combined entity as the second-largest insurance aggregator in India, according to a report by Mint.

The deal will involve a cash-and-stock transaction, with some early investors in RenewBuy potentially selling a portion of their stakes. The merged entity is expected to secure additional funding ahead of a potential initial public offering (IPO).

The deal could also streamline the IPO path for CarDekho, which is targeting a public listing in the next fiscal year. Currently, CarDekho’s co-founder and CEO, Amit Jain, holds over a 70% stake in InsuranceDekho. According to sources, the group aims to offload more than a 20% stake in the Gurugram-based company before filing the Draft Red Herring Prospectus (DRHP).

The combined entity aims to offer a broader product range, enhanced customer experience, and improved operational efficiency. The development comes soon after InsuranceDekho received the composite insurance broking license from the Insurance Regulatory and Development Authority of India (IRDAI).

The company also raised $60 million in a Series B funding round spearheaded by Mitsubishi UFJ Financial Group in October last year.

While InsuranceDekho has yet to report FY24 results, the firm posted Rs 96.5 crore in revenue in FY23 as compared to Rs 47.9 crore in FY22. It also reduced losses by 28.6% to Rs 51.6 crore during FY23.

Renewbuy, on the other side, scooped up $40 million in its ongoing Series D funding round in July last year. The nine-year-old company has not disclosed its financials for FY23 and FY24, it reported Rs 190.8 crore in revenue with Rs 98.9 crore loss in FY22.