General Atlantic plans to increase stake in Amazon-backed insurtech Acko • TechCrunch

General Atlantic is in talks to invest about $50 million in Acko, two sources familiar with the matter told TechCrunch, doubling down on its bet on Indian insurtech at a time when most investors are treating investment opportunities cautiously.

The New York-based growth equity investor is positioning itself to lead a new funding round of around $100 million in the Indian startup, the sources said, requesting anonymity as the details are private. The new round – which looks set to be funded almost entirely by existing backers – is expected to progress to an almost flat valuation of $1.2 billion to $1.25 billion, one of the sources said.

The investment has not closed, so the terms of the deal may still change, the sources warned. Acko, which became a unicorn last year after securing a funding round led by General Atlantic, and the investment firm declined to comment on Wednesday.

The redeliberations follow Acko’s engagement with PayU earlier this year to raise more than $200 million at a valuation of $1.8 billion, one of the sources said. It is not known why these talks failed. Indian newspaper Economic Times reported last month that PayU had offered a term sheet to Acko.

Acko – which counts Lightspeed Venture Partners India, CPPIB, Amazon and Multiples Private Equity among existing backers – is among a handful of startups trying to tackle the country’s antiquated insurance industry with a digital product. . It develops and sells small car insurance products (for drivers and others in transportation-related scenarios), health care protections to employers, as well as protection on gadgets.

The startup has distribution partners with a number of companies, including Amazon, which is an existing investor in Acko, as well as travel and hotel booking platform MakeMyTrip, ride-sharing company Ola, the internet giant Bajaj Finance and Urban Company insurance.

Acko said last year it covered nearly a million gig workers nationwide through partnerships with companies including food delivery giants Swiggy and Zomato.

Offering a large catalog of small insurance policies is crucial for businesses in India. Only a fraction of the country’s 1.3 billion people currently have access to insurance and most cannot afford large policies. According to the rating agency ICRA, insurance products had reached less than 3% of the population in 2017. An average Indian earns around $2,100 a year, according to the World Bank. ICRA estimated that among Indians who purchased an insurance product, they spent less than $50 on it in 2017.

Its new funding deliberations come at a time when deal flow activity has been hit hard in the South Asian market, as investors are wary of writing new checks and are evaluating their post-market underwriting models. falling valuations of listed companies.

Indian startups raised $3 billion in the quarter that ended in September, down 57% from the previous quarter and 80% year-on-year, according to the news platform commercial Tracxn.