The Bengaluru-based insurtech firm entered the coveted club with a valuation of $1.9 billion.
Indian insurtech firm Digit Insurance on Friday, January 15, announced that it has entered the coveted unicorn club after raising US$18.5 million from existing investors. Valued at $1.9 billion, the Bengaluru-based startup is India’s first unicorn of 2021.
“In an almost-recession like year for most businesses and when the insurance industry itself grew by 0.1%, Digit grew by 31.9%, earning a premium of US$186 million between April 2020 and December 2020,” Digit said in a statement.
The company also stated that it generated profits in all three-quarters of 2020-2021 fiscal year. During the pandemic, Digit launched new products such as fixed-benefit cover for COVID-19 under the sandbox initiative of India’s insurance regulator IRDAI (Insurance Regulatory and Development Authority), under which, products can be tested on a pilot basis for six months. Furthermore, it provided its Digit Group Illness Insurance product to over two million customers.
Digit offers a range of products across travel, property, vehicle, and health insurance. It simplifies insurance by leveraging cloud-based technology such as smartphone-enabled self-inspection and audio claims.
“Our strategy was to simplify products and process and back it up with good service,” Goyal told The Times of India. “This is working for us in achieving growth.”
Furthermore, the use of artificial intelligence, machine learning, and image analytics helps the company to perform faster fraud identification and claims settlement, Goyal said. For instance, AI-based solutions can recognize basic checks like bike registration number and the color of the bike to speed up the process of inspection and issuance of bike insurance.
The company’s fully cloud-based systems also enabled it to continue working during the pandemic-induced lockdown. Since its inception, the company claims to have gained 15 million customers.
In its first external funding round in January 2020, the insurance startup raised $84 million from three growth equity investors – A91 Partners, TVS Capital, and Faering Capital. The round resulted in a valuation of about $870 Million. It had then noted that it holds 1.2% market share of the general insurance industry in India.
India is the tenth largest life insurance market across the globe. According to a report by India Brand Equity Foundation (IBEF), the Indian insurance industry was expected to reach US$280 billion by the end of 2020. The industry’s growth will be supported by the growing middle-class population, young insurable population, government programs to increase insurance cover, strong economy and growth in automotive industry, and increasing awareness about the need for protection and retirement planning.
The country is home to over 110 insurtech startups. Some of the players include Mumbai-based auto insurance provider Acko, Sequoia-backed Turtlemint, which raised US$30 million in November last year, and Gurugram-based Toffee Insurance.
India added a record 11 startups to the unicorn club in 2020, of which, three crossed $1 billion in valuation in December alone. Spread across a range of sectors – edtech, fintech, and content – these startups are Unacademy, FirstCry, Dailyhunt, Postman, Pine Labs, Zerodha, Razorpay, Zenoti, Nykaa, Cars24, and Glance.
Header image courtesy of Digit Insurance