A proposal seeking clearance for the investment is pending with Foreign Investment Promotion Board (FIPB) according to an official with direct knowledge of the deal.
“The hearing is coming up in a few days time,” said the person. The Silicon Valley based fund is expected to invest 35 crore in the broking firm which is being valued at around Rs 130 crore according to an industry executive aware of the negotiations.
Alliance, founded in 2003 by SV Thakkar, a veteran in the insurance industry is one of the first 10 broking houses to start operations in India. It offers services like insurance solutions, claims management, insurance audit and renewal reviews.
Separate emails sent to Mayfield and Alliance on the proposed investment did not receive any reply.
If the clearance from FIPB is received, the broking firm will use the capital raised to expand operations at a time when the insurance sector is seeing a revival.
“Long-term prospects for life insurance business are bright if insurers don’t have to live with regulatory uncertainty which hinders long-term planning and makes shareholders wary of committing capital to this sector,” said Rajesh Relan, MD, MetLife India. Other recent investments in the sector include US-based PE firm LeapFrog Investments’ acquisition of 15% stake in Mahindra Insurance Brokers. LeapFrog had also invested in Shriram CCL, a subsidiary of Shriram Capital, in 2011.
Mayfield Fund, focuses on early-stage to growth-stage investments.