Online insurance platform Coverfox has completed its $22-million (Rs 144 crore) Series C funding round, which was led by International Finance Corporation, the private-sector investment arm of the World Bank.
US-based corporate venture capital firm Transamerica and other existing investors also took part in the funding round, Coverfox said in a statement.
Coverfox CEO Premanshu Singh said the company will use the money to strengthen its product and technology capabilities as well as improve user experience by going both horizontal and vertical into each insurance category.
The investment will help accelerate the firm’s geographic expansion and broaden its product portfolio. According to the company, insurance penetration in rural areas is 35% lower than in urban areas and women’s insurance coverage is 40% lower than men.
“By investing in Coverfox, IFC is giving a push to the country's digitisation agenda by leveraging technology to deliver insurance products to customers outside metros and to women who are currently underserved,” said Jun Zhang, IFC country head for India.
The announcement comes 10 months after VCCircle first reported, in June 2017, that the insurance firm had raised capital as part of its Series C round from new and existing investors. Between 2016 and 2018, the company secured Rs 49 crore ($7.6 million) in numerous tranches. Most recently, in March this year, VCCircle reported that Dutch insurance, pension and asset management firm Aegon NV had put in capital into the insurance firm. The deal valued the portal at around $62 million (Rs 402 crore). In May 2017, Aegon invested Rs 22 crore in Coverfox through its New York-based venture fund Transamerica Ventures.
Coverfox secured the first tranche of the Rs 49-crore investment in November 2016, when it mopped up Rs 27 crore from venture capital firms Accel Partners and SAIF Partners, which put in Rs 15 crore and Rs 7 crore, respectively, in this round.
Infosys co-founder NR Narayana Murthy, through his family office Catamaran Ventures, and Infosys co-founder Senapathy Gopalakrishnan and Sudha Gopalakrishnan, through Pratithi Investment Trust, also invested in this tranche. Venkatram Krishnan and Subba Rao of NuVentures invested the remaining amount.
Coverfox received the second tranche in May 2017 from Transamerica Ventures, which invested around Rs 22 crore. Catamaran also put in a small amount in this tranche.
Operated by Glitterbug Technologies Pvt. Ltd, Coverfox was founded in 2013 by IIT Bombay graduate Devendra Rane and MICA Ahmedabad alumnus Varun Dua. Dua quit Coverfox in 2016 to float Acko General Insurance Company, an online insurance policy provider.
The company offers health, car, home and travel insurance online. Using its proprietary technology and an algorithm-based platform, users can compare and buy a range of plans from top insurance companies. In 2017, the company launched Android app Coverdrive to help insurance agents go digital and grow their businesses. It is also targeted towards creating job opportunities for college students, housewives and unemployed youth in India.
In December 2017, IFC in a disclosure said that it would invest up to $10 million (Rs 64 crore) in Coverfox. In 2015, the online insurance broker raised around $14 million in two rounds from SAIF, Accel and Murthy’s Catamaran.
The insurance firm’s revenue doubled and its loss shrank for the financial year 2016-17. Its total income jumped to Rs 6 crore from Rs 2.6 crore the year before. Net loss narrowed to Rs 32 crore from Rs 35 crore previously.
Coverfox competes with BankBazaar and PolicyBazaar.
BankBazaar last year raised $30 million (Rs 195 crore) in a Series D round led by UK-based credit rating bureau Experian.
PolicyBazaar is preparing to float an initial public offering. VCCircle had reported that the company had approached merchant bankers for its Rs 1,000-crore public issue.