InsuranceDekho and RenewBuy, prominent contenders in India’s insurance landscape, are poised for a merger aimed at establishing a formidable presence in the insurance aggregation sector and directly competing with the market leader, PolicyBazaar.
The merger is projected to create a combined entity valued at over ₹8,000 crore (approximately $950 million), with RenewBuy estimated at around ₹3,000 crore and InsuranceDekho at more than ₹5,000 crore. This strategic union is expected to position the new entity as the second-largest insurance aggregator in India, as reported by Mint.
The merger will be executed through a cash-and-stock arrangement, with some early investors in RenewBuy likely to divest portions of their stakes. Furthermore, the newly formed entity is anticipated to attract additional funding in preparation for a potential initial public offering (IPO).
This deal could facilitate a smoother IPO process for CarDekho, which aims for a public listing in the upcoming fiscal year. Currently, CarDekho’s co-founder and CEO, Amit Jain, possesses over a 70% share in InsuranceDekho. Sources indicate that the group plans to offload more than 20% of its stake in the Gurugram-based firm prior to submitting the Draft Red Herring Prospectus (DRHP).
The merger’s objectives include broadening the product offerings, enhancing customer satisfaction, and increasing operational efficiency. This announcement follows InsuranceDekho’s recent acquisition of a composite insurance broking license from the Insurance Regulatory and Development Authority of India (IRDAI).
Additionally, InsuranceDekho secured $60 million in a Series B funding round led by Mitsubishi UFJ Financial Group in October of the previous year.
While InsuranceDekho has yet to publish its FY24 results, it reported revenues of ₹96.5 crore in FY23, a significant increase from ₹47.9 crore in FY22. The company also managed to cut its losses by 28.6%, reducing them to ₹51.6 crore during FY23.
In contrast, RenewBuy raised $40 million in its ongoing Series D funding round in July last year. Although the nine-year-old company has not released its financial data for FY23 and FY24, it recorded ₹190.8 crore in revenue and a loss of ₹98.9 crore in FY22.
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