Insurance marketplace giant Policybazaar is reportedly eyeing an IPO for 2021, which would value the business upwards of $3.5bn.
In the lead up to the public launch, the InsurTech is looking to raise a $250m funding round in September at a $2bn+ valuation, according to a report from Bloomberg. The company will then position itself for an initial public offering in September 2021.
The company has picked two or three IPO lead underwriters, but it is not clear who these are.
Policybazaar CEO Yashish Dahiya said it is looking to list in Mumbai, but will consider a dual listing if possible, the article said.
The InsurTech offers an online marketplace for health, car, home, travel and child insurance policies, among others. Users can compare more than 250 plans and are fully supported with cancellations and endorsements.
Policybazaar will likely be looking at fellow InsurTech Lemonade’s success with its IPO and hope to match it. Earlier in the month, Lemonade launched publicly and reached a $3bn market cap on its first day.
Earlier in the year, Policybazaar raised a further $130m in funding from Japanese conglomerate SoftBank. Following the close of the investment, SoftBank now has a 15% stake in the business.
A report claims that these secondary shares were bought by SoftBank at a premium to the valuation of $1bn.
This isn’t the first time SoftBank has invested into Policybazaar. The InsurTech raised $200m Series F round, which was led by SoftBank.
However, an article from the Financial Times claims PolicyBazaar’s Yashish Dahiya believes the expansion pushed by investors include SoftBank was a “mistake” and led the InsurTech to run at a loss.
This equity was used to increase its capacity by hiring staff for its call centre and operations in a bid of winning more users. However, Dahiya believes this was the wrong strategy. He said, “There wasn’t… rational thinking about it. We had a lot of capital, a lot of capital, and there was a lot of push from our investors.”
Despite the negativity, he said that they have learned from their mistake and has reduced its marketing efforts to focus on core products. The InsurTech is looking to reach profitability by the end of the year.
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