Zopper raises $75M to solve India’s insurance problem

Published by
Peter Kavinsky

For more than half a century, Zopper has built a platform for small and medium businesses, helping merchants invoic and make payments through their point of sale platform. He sold that IP to PhonePe in mid-2018, but instead of joining the fintech giant, Zopper worked on the new venture from the ground up and independently of PhonePe. The business, an insurance infrastructure API platform, said Tuesday that it has raised $75 million in new funding.

The New Delhi-headquartered startup’s Series C funding was spearheaded by Creaegis. ICICI Venture and Bessemer Venture Partners, as well as existing sponsor Blume Ventures, also contributed to the funding, the startup said. Zopper, an 11-year-old startup, has raised $96 million to date. He did not disclose the score on which he closed the round.

Zopper works with insurance companies to create personalized, byte-sized products that are then shipped to distribution partners. This approach sets Zopper apart from many of its competitors in India, which are bundling coatings from different manufacturers and trying to reduce the number of distributors and reach consumers directly.

“If you look at insurance penetration in India today, it’s only 3-4%,” said Surjend Kuila, founder and CEO of Zopper, in an interview. “If you’re trying to get new people into insurance, you just can’t sell schemes to them for more than $37 to $50 a year.”

Offering customers pieces of insurance coverage in smaller packages has also not been successful, he said, because no one has the opportunity to make money.

Zopper is trying to solve this problem by cooperating with banks, non-banking financial institutions, retail chains, transport companies that already have a customer base. “These partners need an insurance platform, and we provide it,” he said.

Kuila stated that no other firm takes this approach and therefore cannot lower the cost of customer acquisition. “That’s why even Policybazaar [online insurance aggregator that became a public company last year] disadvantageous,” he said. By contrast, Zopper has been profitable for over 18 months, he says.

“Our thesis was clear from the beginning: the infrastructure already exists. Someone has invested capital in building this infrastructure. So why don’t we then use technology to streamline that instead of building everything from scratch,” he said.

Zopper’s current coverage portfolio (Image credit: Zopper)

Currently, Zopper has a presence in over 1,200 cities in India and has partnered with over 150 industry players, including retail group Amazon, startup Ola, retail chain Croma, phone maker Xiaomi, Japanese conglomerate Hitachi and Equitas Small Finance Bank.

“We truly believe in Zopper’s vision to transform and automate the insurance distribution model in India. Over the years, they have demonstrated the value of their technology and product innovations to their ecosystem partners and insurance companies,” said Prakash Parthasarathy, managing partner of Creaegis.

“All of this has been achieved in a very cost effective manner and our investment will help his experienced management team, led by Surgendu and Mayank, expand and improve access to a wider client base. We are honored to be their partner and we are committed to supporting them along the way, given our experience in this area.”

The startup plans to use the new funds to significantly expand its workforce, as well as explore acquisition opportunities for smaller startups, Kuila said. Not in a hurry to publish. He said that Zopper initially aims to reach nearly $1 billion in revenue, and it will file for an initial public offering within about five years.

The startup’s sale of its previous business to PhonePe was misrepresented by some news organizations as an acquisition. Kuila said PhonePe never held a stake in Zopper, and the startup, which has Tiger Global among its backers, is still backed by original backers and new investors.

“Given ICICI Venture’s successful investment track record in the insurance sector, we believe Zopper is well positioned to capitalize on this long-term growth opportunity,” said Gagandeep S. Chhina, director of private equity at ICICI Venture, a firm that has begun investing in local firms. . over 30 years ago. “We are excited to support Zopper’s leadership’s commitment to making Zopper a leading player in the Insurtech space through scalable technology, links to multiple insurance companies, and channel partnerships across multiple sectors.”

Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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