Zopper raises $75 Million to address India’s insurance problems

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Zopper has been building a platform that helps small and medium-sized merchants invoicing and paying through their point-of-sale system for more than a half-century. In mid-2018, it sold the IP to PhonePe, but Zopper instead of joining the fintech giant, Zopper started a new venture, completely independent from PhonePe. The API platform for insurance infrastructure announced Tuesday that it had raised $75 million.

Creaegis led the Series C funding for the startup based in New Delhi. The startup stated that funding was also provided by ICICI Venture, Bessemer Venture Partners and existing backer Blume Ventures. Zopper, an 11 year-old startup has raised $96 millions to date. It did not disclose the amount at which it closed the round.

Zopper partners with insurance companies to create customized products in byte-sized sizes that it then sells to distributors. This is what sets Zopper apart from other Indian competitors that aggregate coverages from multiple manufacturers. They also aim to reduce the number of distributors so they can directly reach customers.

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Surjendu Kuila (founder and chief executive officer of Zopper), stated that India’s insurance penetration is only 3 to 4%. You can’t sell insurance plans that cost more than $37-$50 per year if you want to attract new customers to your company.

He said that offering customers small amounts of insurance coverage in smaller packages has not been a success because there is no profit margin.

Zopper aims to address this problem by partnering banks, non-banking financial institution, retail chains, and mobility firms that have a captive customerbase. He stated that these partners require an insurance platform and that’s exactly what we offer.

Kuila stated that no other company is using this approach and therefore has not been able lower their cost of customer acquisition. He stated that Policybazaar, an online insurance aggregator, became a public company last year. “That’s why it’s not profitable.” He said Zopper has been profitable for more than 18 months.

“Our thesis since the beginning has been clear: There is already infrastructure. Someone has invested capital to build this infrastructure. He suggested that technology could be used to streamline the process instead of starting from scratch.

Zopper is currently present in more than 1,200 Indian cities. It has partnered up with more 150 industry players, including Amazon, Ola, Croma, smartphonemaker Xiaomi, Hitachi and Equitas Small Finance Bank.

We believe in Zopper’s vision to transform and automate the Indian insurance distribution system. Prakash Parthasarathy (Managing Partner at Creaegis), said in a statement that they have proven their tech and product innovation value over the years to their ecosystem partners as well as insurers.”

“All of this was achieved in a capital efficient manner. Our investment will assist its accomplished management team led Surjendu and Mayank, to scale up and increase access to a larger customer base. Their partner is an honor and we look forward to supporting their journey based on our extensive experience in this industry.

Kuila stated that the startup will use the new funds to expand its workforce and explore potential acquisition opportunities for smaller startups. The startup is not in a hurry to go public. Zopper initially wants to reach $1 billion in revenues and will then file for an initial public offer over five years.

Many misreported the sale of the startup’s previous business to PhonePe as an acquisition by news organizations. Kuila stated that PhonePe did not own any shares in Zopper, and that the startup, which counts Tiger Global as its backer, is still supported by its early investors and new investors.

“Given ICICI Ventures success in the Insurance sector investment track record, we believe Zopper is well positioned for this long-term growth opportunity,” Gagandeep S Chhina (Director of Private Equity, ICICI Venture), said that Zopper was well positioned to capture it. The firm began investing in local businesses over 30 years ago. We are proud to support the vision of Zopper’s management team to make it a major Insurtech player.

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