Bengaluru-based insurance company offering health, car, bike, and travel insurance Digit Insurance valued at $3.5bn after raising $200m led by Faering Capital.
New investors Sequoia Capital India, IIFL Alternate Asset Managers, among others, participated in the fundraise, which is subject to approval from the Insurance Regulatory and Development Authority (IRDAI).
The investors of the Fairfax-backed insurance company also include A91 Partners, TVS Capital Funds and Indian Cricket Team Captain Virat Kohli.
The company claims this to be one of the biggest funding rounds in the Indian insurance industry bringing the total capital infused into Digit Insurance up to $442m. The funding comes shortly after Digit Insurance attainted the unicorn status in January 2021.
The capital will be used to shore up the solvency requirement of 150% insurers’ liability mandated by the regulators. It will also help maintain its growth trajectory and settle claims in the event of a potential third wave of Covid-19 in the country.
The company makes use of technology to simplify processes for customers, such as smartphone-enabled self-inspection and audio claims. They are 100% on cloud and have launched several offerings relevant to the ever-emerging needs of customers.
Digit claims that it grew by 44% with a premium of Rs 3,243 crore between April 2020 and March 2021.Digit has achieved gross written premium growth of 70% versus 17% for the general insurance industry in that time period. Furthermore, since its inception, it has provided insurance to more than 2 crore customers and has processed over 4 lakh claims.
Commenting on the new round, Digit chairman and founder Kamesh Goyal said, “We will continue to focus on increasing insurance penetration and simplifying processes through technology. Customer service remains our key focus which is evidenced by our high customer rating, 4.7 on Google and 4.9 on Facebook based on 29,000 reviews, and fast claim settlements.”
He attributed the pandemic and repeated natural calamities to be the key reasons to have drawn people’s attention towards the importance of insurance. “We have covered more than 36 lakh lives over 32,000+ corporates under corporate health insurance alone,” he said.
Echoing a similar senitment, Fairfax Financial holdings, the first investor in Digit Insurance, chairman Prem Watsa added, “It was a difficult year for economies the world over but I am glad to see Digit continuing to stick to its mission of simplicity and growing ahead of the industry. Their relevant products, tech-enabled, simple processes and customer-centric approach sets them apart.”
The latest funding round will take the share of risk capital investors in the startup to around 17%, while the balance of about 82% is owned by Fairfax and its subsidiary Digit Infowork.
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