Acko raises up to $150 million from Multiples PE, GA, others

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Digital insurer Acko General Insurance is poised for $100-150 million (approx 820-1,200 crore) from new and existing investors, said two people who were aware of the development.

After protracted valuation discussions, existing investors Canada Pension Plan Investment Board (CPPIB), General Atlantic (GA) and Multiples Private Equity agreed to contribute more capital in a likely Series E round, said the above people looking for to anonymity.

“While General Atlantic demanded to invest around a flat valuation, other existing investors pushed to negotiate higher. The new round is likely to pay a small premium over the previous round ($1.1 billion) after several negotiations between the existing investors delayed fundraising. It is now awaiting regulatory approvals from the Competition Commission of India (CCI) and will complete the round in the next 35-40 days,” said one of the two people.

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While the latest round is significantly higher than the previous one, it may not be the expected valuation of more than $2 billion as some publications reported.

An Entrackr report said Prosus (formerly Naspers) was in talks to lead the funding round in the Bengaluru-based insurtech startup, but this could not be independently confirmed. Emails sent to General Atlantic and Multiples PE went unanswered until going to press. While CPP Investments declined to comment, Prosus said: “We do not comment on market rumors or speculation.”

When reached out, Varun Dua, founder and CEO of Acko General Insurance, did not name investors, funding amount or valuation, but confirmed the fundraising, attributing the delay to regulatory approvals.

In October 2021, Acko became India’s 34th startup to become a unicorn (a private company with a valuation of $1 billion and above) after raising $255 million in a Series D round led by General Atlantic and Multiples PE against a valuation of $1.1 billion. CPPIB and Lightspeed Growth also participated in the round, along with existing investors Intact Ventures and Munich Re Ventures.

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Acko’s early investors include Amazon India, Accel, Elevation Capital (formerly SAIF Partners), Ascent Capital, Flipkart co-founder Binny Bansal, Infosys co-founder NR Narayana Murthy’s Catamaran Ventures and Infosys co-founder Kris Gopalakrishnan.

Founded in 2016 by Dua and Ruchi Deepak, Acko General Insurance operates as a subsidiary of Acko Technology and Services Pvt. Ltd. The company owns and operates the digital insurance portal Acko.com to provide services such as auto insurance, car insurance, third party and comprehensive insurance, premium calculator, and auto and two-wheeler claims. It also offers health and electronics insurance products.

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The online insurer sells its products digitally directly to consumers without the intervention of insurance agents of traditional insurance companies.

Acko General Insurance more than doubled its turnover 1,087.5 crore in FY22 onwards 475.3 crore in the previous fiscal year, largely driven by sales of health insurance products. However, the loss of the insurtech startup amounted to 382 crore in FY22 onwards 132.5 crore from a year ago.

In 2022, total fundraising by insurtech startups fell 39% to about $534.2 million from $880.8 million in 2021, data from researcher Tracxn showed. However, this year could see an uptick as more entities than Acko are already in talks with investors to raise capital.

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