Cloud-based general insurance company Go Digit General Insurance, which owns Digit Insurance, has received an approval to raise $84 million in its first external finance round.
IRDAI (the Insurance Regulatory and Development Authority of India) approved the funding from A91 Partners, Faering Capital and TVS Capital. The company is valued at $870 million post money.
As part of the round, 72 Digit employees also invested $4.34 million in the company.
Bengaluru-headquartered Digit has so far raised $140 million from Canadian billionaire Prem Watsa’s Fairfax Financial Holdings, which will be diluting less than 10% equity for the current round, Kamesh Goyal, founder of Digit Insurance told TechCircle. Fairfax holds close to 45% equity in the company.
With the current round coming from Indian funds, the FDI (foreign direct investment) in the insurance company continues to be well under the 49% limit set by the government.
“We have been a cash flow positive company for the last two years and the current round of funding will help us maintain our solvency margin. Also the round will help our employees and the team see the value in their Employee Stock Option Plans,” Goyal on a call said.
Digit was founded in 2017 and claims to command 1.2% of the general insurance market share.
“From insurance to insurtech – the industry is going through a basic transformation, and Go Digit Insurance is at the cutting edge of this change. With their approach focussed on customer-centricity, prudent underwriting and technology for operational excellence, we are excited to partner with Kamesh and see the new phase of insurance touch many lives in India, via a simplified user experience,” said Gopal Srinivasan of TVS Capital Funds in a statement.
Investor interest has increased in the insure-tech space, primarily driven by the possibility of FDI being increased to 74% through direct route in insurance companies as part of the upcoming budget announcement.
In December, online insurance platform Toffee Insurance $5.5 million in a Series A round.
Digit competitor, Acko General Insurance has also been in the process of raising $40 million round, part of which came from Flipkart cofounder, Binny Bansal.
In January 2019, Sequoia led a $25 million round in insurance platform, Turtlemint.