SUMMARY
- InsuranceDekho is in discussions to acquire RenewBuy.
- RenewBuy is expected to be valued at $350 million, while InsuranceDekho’s offer is set at $600 million.
- It would result in a combined value of nearly $1 billion for the newly formed entity.
Insurance broker InsuranceDekho is in discussions to acquire its smaller competitor in the insurance distribution sector, RenewBuy, through a large share-swap deal.
RenewBuy is expected to be valued at approximately $350 million, while InsuranceDekho’s offer is set at $600 million, resulting in a combined value of nearly $1 billion for the newly formed entity, one of the insiders shared.
Through this merger, RenewBuy’s investors will receive shares in InsuranceDekho in a ratio that reflects the value of both companies, as the second source informed.
RenewBuy is backed by major investors such as Dai-ichi Life Holdings, Apis Growth, Lok Capital, IIFL Asset Management Company, and others. It has collectively raised $141 million, as reported by Tracxn. It is also noted that some of the initial investors may choose to sell their shares and exit the company.
“The exact contours of the deal are still being worked on, but some of the early investors of RenewBuy may get a complete or a part-exit through the secondary sale of shares,”another insider mentioned. In a secondary share sale, the funds from the transaction are distributed to the existing investors rather than the company itself.
Sources have stated that Balachander Sekhar, the CEO of RenewBuy, will be joining Ankit Agrawal, the CEO of InsuranceDekho, to lead the newly merged entity.
“The agent network of both the companies will be brought together post the completion of the deal, thereby undertaking a major consolidation in the insurance distribution business,” shared the source.
Gurugram-based InsuranceDekho reported a net revenue of Rs 100 crore in FY23, with a net loss of Rs 51.6 crore. To date, InsuranceDekho has secured $310 million in equity funding from investors such as Mitsubishi UFJ Financial Group, TVS Capital, and Goldman Sachs Asset Management.
This move comes at a time when there is increased competition among companies like PB Partners, a division of the listed insurance major Policybazaar, InsuranceDekho, which was spun off from the used car platform CarDekho, Nexus Venture Partners-backed Turtlemint, and RenewBuy. All these companies operate in the point-of-sale (PoSP) business, where brokers assign their own agents to sell insurance products like health, life, motor, and term insurance to customers nationwide.
“The acquisition makes sense for InsuranceDekho since it will get a major boost in terms of its physical network of agents and help create a very strong player in this area, especially given that the well-capitalised PolicyBazaar is aggressively chasing market share,” added another source.
