Gurgaon based eTechAces Marketing and Consulting, the owner of the online policy aggregator PolicyBazaar, has raised $40 million in a Series D round of funding from PremjiInvest and a set of new and existing investors including Tiger Global and Ribbit Capital, reports Techcircle. Others participating in the round include Steadview Capital and ABG Capital.
The startup will use the funding for upgrading its technology, marketing and building up the its recently launched PaisaBazaar. Note that the startup had previously raised around $20 million in funding through undisclosed investors in May last year. The startup had said then that it would invest in increasing its tech team and improving its mobile offering.
FDI limits: As of January last year, Policybazaar had exceeded the FDI limit of 26% set by the Insurance Regulatory and Development Authority (IRDA), with as much as 38% of Policybazaar owned by foreign investors. During the previous fundraise the company had refused to comment if the money had been raised from an Indian investor or a foreign investor, however this investment does come from an Indian company.
A note on IRDA policies: India’s insurance regulator IRDA had started regulating online insurance aggregators by defining the terms under which they operate including the business model and remuneration processes back in 2011. Yashish Dahiya, founder and CEO of Policybazaar had told Medianama back in 2013 that its business had become uneconomical following the IRDA policies.
However, just last month the Insurance bill was passed by the Government which approves up to 49% FDI in Indian insurance companies. Interestingly, although 49% investment has been allowed, the Insurance Bill mandates that the management control lies with Indian nationals only. This should help companies like PolicyBazaar raise further foreign investment without regulatory issues.
PolicyBazaar currently provides users with comparison of various insurance plans including life insurance, motor insurance, investment plans, travel insurance, health insurance and home insurance. The platform claims to provide lifetime support, including when claiming insurance. Launched in 2008, it claims to have served over 5 million customers so far.
Its sister site PaisaBazaar, which was launched in August last year, provides the user with the ability to check eligibility for personal loans, home loans, loans against property and education loans. Users are required to disclose certain information, such as how much the user wants to borrow, the term of the loan, mobile numbers and email address before the website displays any comparison. Its worth noting Paisabazaar forces the user to agree to receive unwanted calls.
“I authorize Paisabazaar & its associates/partners/financial institutions to call me or SMS me with reference to financial products. This consent will override any registration for DNC / NDNC.”