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InfoEdge’s stake in PolicyBazaar down to 18%, following recent round of funding

PolicyBazaar

Info Edge, which was the first company to invest in online insurance aggregator PolicyBazaar, has informed the BSE that its stake in PolicyBazaar’s parent company eTechAces Marketing and Consulting Pvt. Ltd currently stands at 18%, following PolicyBazaar’s recent round of funding in which it raised Rs 255 crore (about $40 million) from PremjiInvest and a set of new and existing investors including Tiger Global, Ribbit Capital, Steadview Capital and ABG Capital. At the end of FY15 (March 31, 2015), Info Edge owned 23% of the paid up capital of eTechAces.

So far, Info Edge has invested Rs 32.5 crore in PolicyBazaar, including Rs 2.5 crore in April 2013, Rs 10 crore in April 2011 and Rs 20 crore in September 2008. Info Edge didn’t participate during PolicyBazaar’s previous round of funding in May 2014, and had diluted its stake to 23% from about 32%. Info Edge initially held a 49% stake in the company.

Readers will remember that in January last year, PolicyBazaar had exceeded the FDI limit of 26% set by the Insurance Regulatory and Development Authority (IRDA), with as much as 38% of PolicyBazaar owned by foreign investors. In fact, at the time, Info Edge was its only Indian investor. It’s worth noting that last month the Insurance Bill was passed by the Government which approved up to 49% FDI in Indian insurance companies. Interestingly, although 49% foreign investment has been allowed, the Insurance Bill mandates that the management control lie with Indian nationals only. This should help companies like PolicyBazaar raise further foreign investment without regulatory issues.

Banking on 99Acres and Zomato

Info Edge’s online recruitment solutions business Naukri.com still remains its primary source of revenues, despite years of investments in other businesses. Real estate portal 99Acres.com is the business the company is banking on, to bring the next level of growth. Last year, Info Edge raised Rs 750 crore (about $120 million) to primarily invest in 99Acres. (Also Read: How 99Acres plans to use the $120 million it has raised)

The company is also banking on Zomato: Info Edge founder and vice chairman Sanjeev Bikhchandani had mentioned during the company’s Q2-FY15 earnings conference call that Naukri, 99Acres and Zomato are three businesses that are currently “moving the needle” for them. “So naturally we will be reluctant to let go of any of that”. He also mentioned that Info Edge will be reluctant to reduce its stake in Zomato below 50%. They stuck to their words and invested Rs 185 crore of the Rs 370 crore Zomato raised in November 2014, to retain majority 50.1% stake in the company.

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