Policybazaar to raise US$ 150M as buffer capital

Policybazaar, India based insurance aggregator, plans to raise $150 million (INR 1,100 Cr) as buffer capital during the third quarter of FY21.

Even though the company doesn’t require capital for business expansion, it wants to be careful and raise additional funds as a buffer in the case of any unforeseen event.

About Policybazaar

Policybazaar is an insurance aggregator and a global financial technology company based in Gurugram, India. Launched in June 2008, the company was founded by Yashish Dahiya, Alok Bansal and Avaneesh Nirjar. Policybazaar offers life insurance, investment plans, health insurance, motor insurance, among other services.

Statements from Policybazaar

Yashish Dahiya, CEO and co-founder of Policybazaar.com Group, said, “We might raise some capital as a buffer. You never know what will happen in the future. This year COVID happened. What if something else happens in the future? We may raise about $150 million, but that is more for safety than for any plan. It may happen in Q3,” he said.

Due to the surge in demand for insurance products amid the COVID-19 pandemic, Policybazaar expects to be profitable this fiscal year. Policybazaar’s growth over the last year has been between 70-100% depending on the insurance product. Dahiya said, “We were profitable in FY18, while FY19 and FY20 we were not quite profitable. So this (growth in business) will help us to become profitable from this year onwards.”

Policybazaar is starting to look into consolidating its operations, investing in customer service, and working towards capital efficiency as it hopes to swing back into profitability in 2021. Dahiya said, “Despite booking a loss, the company’s revenue jumped three-fold, while it doubled both market share and valuation at the end of FY20.”

According to Dahiya, Policybazaar should log revenue of US $146K (INR 1,100 Cr) and post a marginal profit during fiscal 2020-21. In addition, on the insurance premium side, the current fiscal would close with US 800$ K (INR 6,000 Cr) compared to US$ 530K (INR 4,000 Cr) in FY20.

When it comes to Paisabaazar, the company’s other business, he said there was some stress as demand for loans had come down significantly due to the COVID-19 crisis.