Exclusive: PolicyBazaar, an Info Edge backed web insurance aggregator has raised Rs. 40 crore (around $9 million at current rates), PolicyBazaar CEO Yashish Dahiya has confirmed to MediaNama. Intel Capital has invested Rs. 30 crore in the company, while Info Edge has also participated, investing Rs. 10 crore. Following this investment, which Dahiya says is the company’s last round of funding prior to an IPO which they’re targeting in the next 3-4 years, the shareholding is split almost equally between the promoters, Info Edge and Intel Capital. This is the first Info Edge backed company to raise additional funding from an external investor. Remember that Info Edge had earlier announced that PolicyBazaar will be made a subsidiary of the company; following this funding, that won’t be the case.
Dahiya says that they’ll use the money to “continue doing what we’re doing so far”, which is “keep spending on platform and on marketing to popularize the platform.” Akshay Mehrotra, the former Head of Marketing of Bajaj Allianz, is joining the company as Chief Marketing Officer. PolicyBazaar currently employs around 300 people in its call center, and is looking to scale up to 700 after this round of funding. “But we will stop there (at 700)”, Dahiya adds. Around 65% of this staff is a call center operation, for qualifying leads and guiding customers; Dahiya expects this to go up to 75%.
Last fiscal year, the company finished within a range Rs. 10-15 crore* topline, up from Rs. 5.5-6 crore the previous year, and it plans to hit Rs. 30 crore in this fiscal, and Rs. 50 crore the year after. Dahiya doesn’t see insurance lead generation as a long term model – “If you give most insurance companies 100 leads, the conversion rates would not be up to par. But if if you control as much of the processes as possible you can, as legally allowed, to help the insurance companies, the results will be there.” The business is linked to conversions of leads into transactions, but it is essentially the advertising business.
On IRDA Guidelines For Web Aggregators
As MediaNama readers may recall, the insurance regulator IRDA had issued draft guidelines last month for regulating the activities of web aggregators, an to us at least, some of the provisions appeared to be extremely restrictive, to the point of killing competition in the web insurance aggregation space, but they would benefit already capitalized players like PolicyBazaar.
Dahiya says that the guidelines are still formative, but they’re positive for the company: “The guidelines allow sharing a lead with five companies, but earlier, you couldn’t because the previous guidelines were on referral arrangement. In our case, we would never share with more than three, so it does legitimize the business. We consider ourselves a marketing channel not a sales channel, which is what they’re considering web aggregators. We had 5 million visitors to our site, and tell us one site with that kind of traffic that doesn’t make advertising revenue. One shouldn’t totally disallow that. We feel that rationality will prevail.”
Update: A miscommunication, it seems. Dahiya informs us that they’re expecting a topline of Rs 10-15 crore, not Rs 18-20 crore.