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Online insurance startup Digit raises $45 mn in fresh funding

Online insurance startup Digit raises $45 mn in fresh funding
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Go Digit Infoworks Services Pvt. Ltd, the parent of online insurance startup Digit Insurance, has raised $45 million (around Rs 310 crore) from existing investor Fairfax Holdings.

The Pune-registered firm said in a statement that $44 million of the total money received from Canadian billionaire Prem Watsa’s Fairfax in this round will go into Digit.

Digit Insurance said it will use the money to invest in new products and expand its distribution network across the country.

Kamesh Goyal, founder and chairman of Digit Insurance, said that the company’s long term goal is to invest in technology that can automate processes and resolve “customer pain points.”

Digit currently has 525 employees on its rolls. The general insurer has partnered with companies such as Flipkart, Paytm, Cleartrip, PolicyBazaar and Tanishq, among others, for products related to mobile phones and flight delays.

The firm has thus far raised a total of $94 million in funding. In June last year, Fairfax pumped capital into Go Digit after tying up with Goyal, a former top executive at German financial services firm Allianz SE. 

Fairfax owned 45% of Digit at the time while Indian investors led by Goyal held the remaining stake.

Fairfax had sold bulk of its stake in ICICI Lombard General Insurance Co Ltd, which went public in September last year.

Last month, Go Digit Infoworks Services Pvt. Ltd agreed to acquire ITI Reinsurance Ltd from The Investment Trust of India Ltd.

Deals in the space
Online insurance companies have been attracting considerable interest from investors in the recent past.

Last month, ETechAces Marketing & Consulting Pvt. Ltd, the operator of online insurance selling platform PolicyBazaar.com and lending marketplace PaisaBazaar.com, raised $200 million (Rs 1,360 crore) in a round led by SoftBank Vision Fund.

In May, Mumbai-based online insurance startup Acko General Insurance Co. Ltd had raised $12 million (around Rs 80 crore) in a round led by e-commerce giant Amazon.

In March, VCCircle had reported that online insurance provider Coverfox’s parent, Glitterbug Technologies Pvt. Ltd, had raised Rs 49 crore ($7.6 million) from Dutch insurance, pension and asset management firm Aegon NV.

Another insurance player, BankBazaar, raised $30 million (Rs 195 crore) in a Series D round led by UK-based credit rating bureau Experian.

Fairfax Holdings

Fairfax has been betting big on India, especially in untapped sectors such as insurance. The firm has made sizeable investments in more than half-a-dozen Indian companies across sectors.

It launched an India-dedicated vehicle, Fairfax India, in November 2014. In January 2015, Fairfax India floated a public offering in Canada to raise $1.06 billion. In January this year, the firm mobilised another $500 million to invest more in India.

VCCircle reported earlier this year that Fairfax would acquire a 51% stake in Kerala-based Catholic Syrian Bank.

Last month, Fairfax came in as a limited partner for a fund that will make debt investments in affordable housing projects.

Overall, Fairfax has made equity investments of about $1.24 billion since August 2015, when it put in money in National Collateral Management Services Ltd, its annual report shows.

It also has significant minority stakes in financial services group IIFL Holdings Ltd and Sanmar Chemicals Group besides owning majority stakes in travel services company Thomas Cook (India), business services firm Quess Corp, Sterling Resorts and Fairchem Speciality.

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