MUMBAI: Coverfox, an online insurance seller, has received an investment from the family office of Infosys’ co-founder N R Narayana Murthy, as it fights out its bigger rival PolicyBazaar, which incidentally is backed by another IT czar Azim Premji.
The investment from Catamaran Ventures is part of the series B round raised by the two-year-old startup from venture capital funds Accel Partners and SAIF Partners in April this year.
Mumbai-based Glitterbug Technologies, which runs Coverfox.com, sells car, bike, health, travel and home insurance with a significant contribution coming from the auto segment.
“The investment will help us accelerate our technology-driven insurance comparison and sales platform,” Varun Dua, co-founder & CEO of Coverfox, told TOI.
He said the company was clocking a monthly growth rate of approximately 30-40% and was poised to reach a run rate of Rs 100 crore in annual gross sales. “We have a strong revenue model as the business is automatically renewed and premiums keep adding to a compounding book,” Dua said.
Coverfox has in all raised around $14 million in venture capital, which excludes the undisclosed amount put by Catamaran.
Dua, who has had stints at AIG and Franklin Templeton, founded Glitterbug along with Devendra Rane, an IIT-Bombay alumnus, in 2011 as a platform which used to build technology for insurance firms.
After two years, the duo pivoted and started selling insurance online under the brand name Coverfox.The domestic insurance market is estimated at $70 billion where online commands a share of around 2% but is growing at 40% annually.
It’s expected that by 2020, India will have a $20-billion strong domestic online insurance market.
“The insurance sector will experience significant growth in India and we believe that the company has the opportunity to lead a meaningful change in how customers view, buy and manage their insurance,” said Abishek Laxminarayan, investment director, Catamaran Ventures.
The Bangalore-based fund which was launched in 2010, last year formed a joint venture with e-commerce giant Amazon’s Asia unit called Cloudtail India as a new entity.
Its other investments include Hector Beverages, which owns the Paper Boat brand, and fashion portal Yebhi.com, among others.
Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance, said, “The online insurance market is soon set to witness substantial growth.
The future is certainly positive as an increased number of internet users will become part of this market in the coming years. With more people buying insurance online, we hope to benefit our customers with such robust associations.”
Industry players say the big challenges in the sector revolve around creating simple online products which are easily understood and seamlessly bought online.
The other stumbling block is on the regulatory front. Online insurance product sellers have to adhere to a 51% Indian ownership cap stipulated by the government, which means they need to have Indian investors on board.
Sector leader PolicyBazaar, which already has InfoEdge, which runs portals like Naukri.com, as a significant investor, closed a Rs 300-crore financing round led by PremjiInvest earlier this year.
Curated from NRN’s Catamaran invests in fintech startup Coverfox