Bengaluru-based insurtech startup Digit Insurance said Tuesday it has raised USD 84 million from A91 Partners, Faering Capital, and TVS Capital, marking the first big investment in India’s fintech space this year.
The new round brings the four-year-old startup’s total funding to USD 224 million. Interestingly, along with the three growth-stage investors, a total of USD 4.34 million was also invested by 72 of its employees in this funding round.
Digit Insurance is owned and run by Go Digit General Insurance Limited. Founded by Kamesh Goyal in 2016, Digit Insurance found its first backer in Toronto-based financial holding company Fairfax Financial in 2018.
Fairfax has invested about USD 5 billion in India over the last five years across sectors such as banking, financial services, travel, transportation, and warehousing. It has a controlling stake in entities like Bengaluru International Airport, Thomas Cook India, Catholic Syrian Bank (CSB), Quess Corp, and National Collateral Management Services. In a September interview with local media Economic Times, its billionaire founder Prem Watsa said he would invest another USD 5 billion in India in the next five years.
Digit Insurance, which caught Watsa’s fancy early on, offers a portfolio of non-life insurance including health, motor, travel, and mobile, among others. The company claims to have reached about 5 million customers in India within two years of its operations and holds 1.2% market share of soon-to-be USD 40 billion general insurance industry.
The company competes with new-age insurance companies like financial services unicorn Policy Bazaar, Acko General Insurance, which has raised over USD 140 million so far and is backed by Amazon, Accel Partners, SAIF Partners, and Flipkart’s co-founder Binny Bansal, among others.
India permits 49% foreign direct investment in the insurance sector, which makes it an attractive destination for global investors. Now that the country is seeing robust digital payment adoption with more people coming online and opting for financial services, the insurance tech startups are raking in money from Indian and global venture capital firms.
“From insurance to insurtech – the industry is going through a basic transformation, and Go Digit Insurance is at the cutting edge of this change,” said Gopal Srinivasan, Chairman, TVS Capital Funds in a statement.
According to the government data, the overall transaction value in the Indian Fintech market is estimated to jump from approximately USD 65 billion in 2019 to USD 140 billion in 2023.