Ace Indian cricketer-backed fintech startup Digit raised fresh funding taking its valuation to $3.5 billion. According to a statement on Friday, the company is raising $200 million from Sequoia Capital India, existing investor Faering Capital Pvt and others. The capital will be used to secure insurance customers via mobile technology.
It is one of the highest funding rounds witnessed in India’s booming insurance sector with competitors like Amazon.com Inc.-backed Acko. Digit is trying to grow India’s base of the insured by buying the cover, submitting claims and receiving payments easier. The company facilitates smartphone-enabled self-inspection and claim submissions by speech and processes service requests via text messaging.
Founded in 2017 by Kamesh Goyal, the platform has provided insurance to more than 20 million customers and processed 400,000 claims. Digit’s first investor was Canadian billionaire Prem Watsa who is of Indian origin. The company’s early backers also included India star batsman Virat Kohli and TVS Capital Funds.
Digit’s fintech performance
The platform’s total policy renewal rates stand at 60 percent for private car insurance, 75 percent for its retail health insurance category, and 90 percent for insurance covers provided by corporates. Further, 20 percent of insurance covers sold on the platform are purchased by corporate clients for their employees.
The startup provides health, travel and auto insurance and in a statement, it said the new funding round is subject to regulatory approvals. The company, formally called Go Digit General Insurance Co., became a unicorn in January after a valuation of $1.9 billion. It’s now almost doubling up its valuation and has raised a total of $442 million.
Sales grew 44 percent in the financial year ending March and the company has turned profitable, a rarity among India’s digital startups. Digit was the first insurance tech startup that came up with the Covid health insurance product concept in February 2020. It now caters to 3.5 million Indians for the infection.
India’s insurance penetration is in the low single digits, Goyal said. “State-owned insurers dominated the market, but private companies have recently gained market share. The fintech segment is just moving into the spotlight. With India’s fast-expanding economy, general insurance has great growth potential,” he added.