True North, IDG Ventures may invests $20 mn into parent company of PolicyBazaar

Private equity major True North and venture capital firm IDG Ventures India are reportedly in advanced discussions with ETechAces Marketing and Consulting Pvt. Ltd, the parent company of online financial services marketplaces PolicyBazaar and PaisaBazaar to invest $20 million in a fresh round of funding.

As reported by ET, the investment is part of a $78 million round led by Boston-based asset management giant Wellington Management. If the deal goes through, it will mark the first investment from private equity firm True North in the digital internet space. True North will be investing around $15 million while the other $5 million is likely to come from IDG Ventures.

The company is also looking to rope in more domestic investors to ensure that the company meets the 51 percent domestic investment criteria laid out by the Insurance Regulatory and Development Authority of India (Irda).

The company’s primary objective from the fundraising is to strengthen its balance sheet, as large online commerce players like Flipkart and Amazon India, which has backed rival BankBazaar, are also eyeing the space beside payments companies like Paytm.

“While the company has turned profitable, the founder believes now is the time to grow aggressively. Another reason behind raising capital is that what will Flipkart and Paytm do with the capital they have raised, and they could look at this space,” said one of the sources mentioned above.

The fin-tech startup is expected to use coming funds to expand PolicyBazaar and PaisaBazaar to new geographies and business categories.

Since Series D funding, it was told that the company is preparing for IPO. But, In March, another reports said the insurance aggregator was close to raising a pre-initial public offering (pre-IPO) funding round worth around $50 million (around Rs 327 crore).

PolicyBazaar was founded in 2008 by Alok Bansal and Yashish Dahiya. It is India’s one of the prominent online life insurance and general insurance aggregator. It claims to be specialized in making a comparative analysis of the insurance products of various insurance policies based on price, quality and key benefits.

On the other hand, PaisaBazaar, founded in the year 2014, is one of India’s largest online destination for all kinds of loans, credit cards, and other financial products.