For more than half a decade, Zopper has built a platform for SMEs, helping merchants invoicing and paying through its point of sale platform. It sold that IP to PhonePe in mid-2018, but instead of joining the fintech giant, Zopper started a new and independent joint venture with PhonePe. That business, an API platform for insurance infrastructure, said Tuesday it has raised $75 million in new funding.
The New Delhi-based startup’s Series C funding is led by Creaegis. ICICI Ventures and Bessemer Venture Partners as well as existing backing Blume Ventures also participated in the funding, the startup said. Zopper, an 11-year-old startup, has raised $96 million to date. It did not disclose the valuation at which it ended the round.
Zopper works with insurance providers and creates personalized, byte-sized products that are then made available to distribution partners. This approach distinguishes Zopper from many of its competitors in India that are aggregating coverages from different manufacturers and trying to cut distributors and reach out directly to consumers.
Surjendu Kuila, founder and chief executive officer of Zopper, said in an interview: “If you look at the penetration of insurance in India today, it’s only 3 to 4%. “If you’re trying to attract new people to insurance, you won’t be able to sell them plans that cost more than $37 to $50 a year.”
Offering customers smaller insurance plans has also not proven successful because it is not profitable for anyone to make money, he said.
Zopper is trying to solve this problem by partnering with banks, non-bank financial institutions, retail chains, mobile companies that already have a long-standing customer base. “These partners need an insurance platform and that is what we provide,” he said.
Kuila claims that no other company is taking this approach and has therefore been unable to reduce their customer acquisition costs. “That’s why even Policybazaar [online insurance aggregator that became a public company last year] not profitable,” he said. In contrast, Zopper has been profitable for more than 18 months, he said.
“Our argument from day one was clear: The infrastructure is in place. Someone has invested capital to build that infrastructure. So why don’t we use technology to streamline that instead of creating everything from scratch,” he said.
Zopper is present in more than 1,200 Indian cities and has partnered with more than 150 industry players including retail group Amazon, ride-hailing startup Ola, retail chain Croma, phone maker Xiaomi , Japanese conglomerate Hitachi and Equitas Small Finance Bank.
“We truly believe in Zopper’s vision to transform and automate the insurance distribution model in India. Over the years, they have proven the value of their technology and product innovation with ecosystem partners and insurance companies,” Prakash Parthasarathy, Managing Partner at Creaegis, said in a statement. declare.
“All of this has been achieved in a capital efficient way and our investment will help the complete management team led by Surjendu and Mayank to scale and improve access to the facility. wider customers. We are honored to be their partner, and we are committed to supporting their journey with our experience in this space. “
The startup plans to deploy new funds to significantly scale up its workforce and also explore opportunities to acquire smaller startups, Kuila said. No rush to make it public. He said Zopper is initially aiming to hit nearly $1 billion in revenue, and in about five years the company will register for an initial public offering.
The sale of the startup’s former business to PhonePe was falsely reported by many as an acquisition by several news organizations. Kuila said PhonePe has never held any shares in Zopper and that the startup, which includes Tiger Global among its backers, continues to be backed by its original backers and partners. new investors.
“Given ICICI Venture’s successful investment track record in the Insurance sector, we think Zopper is well positioned to capture this long-term growth opportunity,” said Gagandeep S Chhina, Private Equity Manager at ICICI Venture, a company that started investing in local companies, said more than 30 years ago. “We are excited to support the management team’s vision of establishing Zopper as an Insurtech leader with scalable technology, multiple insurance company partnerships and relationships. partners with distribution channels across fields. “