NR Narayana Murthy funded online insurance portal Coverfox is in discussions with existing as well as new investors for further infusion of funds to back the company’s expansion plans.
The portal, which was launched two years ago and has been operational since the past 18 months, competes with behemoths like Azim Premji-funded PolicyBazaar. Varun Dua, CEO of Coverfox told ET the firm which has sold 100,000 policies so far, is in the process of scaling up.
In April last year, Glitterbug Technologies -the holding firm for Coverfox -raised $12 million in its series-B funding from growth investment arm of US-based Accel Partners besides existing backers SAIF Partners and Accel India.
The new round came six months after the Mumbai-based startup raised its initial funding round of around $2 million from SAIF Partners and Accel India, who also participated in the new round.
In addition to this, Murthy’s private investment firm Catamaran Ventures also made investment of an undisclosed sum in the company.
“We are currently reasonably well-funded, but will start the fresh fundraise process in the next few months,“ said Dua. A MICA alumnus who has previously worked in marketing positions at Tata AIG Life Insurance and Franklin Templeton Investments, Dua co-founded the start-up with IIT Bombay graduate Devendra Rane.
He said unlike many new age start-ups, the company is in a category where the revenue models are strong. Coverfox, which operates on a broker license from the Insurance Regulatory Authority of India, derives a brokerage from each policy sold through its portal. “We are in the business of paper products, so we don’t have to invest in logistics, warehouses, feet on the street etc,“ said Dua.
FUNDS TO SCALE UP OPS
But the company will require funds as it scales up its operations. “We are talking to both existing investors and have started conversations with some global funds,“ he added.
According to estimates, just a little over 4% of the country’s population is covered by insurance and just about 2% of that market is online. The challenge for the company is not just to create awareness about its own brand but for the overall online industry as well.
Dua says that the credit goes to its large rival PolicyBazaar for creating the market. However, what sets Coverfox apart from the existing players in the industry is its tech-based approach.
“There is a lot of investor interest in financial tech,“ said Dua.
Source: The Economic Times (Bangalore)
Date: 22nd February, 2016.