Indian fintech startup Digit boosted its valuation to $3.5 billion in a fresh funding round, gaining capital for its effort to win insurance customers via mobile technology.
The company is raising $200 million from Sequoia Capital India, existing investor Faering Capital Pvt and others, according to a statement on Friday. It’s one of the largest funding rounds in India’s fast-expanding insurance market also targeted by rival startups including Amazon.com Inc.-backed Acko.
Digit is trying to expand India’s base of the insured by making the process of buying cover, submitting claims and receiving payments easier. The company offers smartphone-enabled self-inspection and claim submissions by voice, and processes service requests via messaging.
The startup, which provides health, travel and auto insurance, said the latest funding round is subject to regulatory approvals. The company, formally called Go Digit General Insurance Co., became a unicorn when it was valued at $1.9 billion in January. It’s now almost doubling its valuation and has raised a total of $442 million.
Digit was founded in 2017 by Kamesh Goyal, an ex-KPMG executive and a three-decade veteran of the insurance industry. Its first investor was Canadian billionaire Prem Watsa, who is of Indian origin, and early backers also included India test cricket captain Virat Kohli and TVS Capital Funds.
Goyal, 55, got his start inspecting motor vehicles and factories for a large state-owned insurer. His startup now has over 20 million customers and has processed nearly half a million claims.
Sales grew 44% in the financial year ending March and the company has turned profitable, a rarity among India’s digital startups. Digit introduced what it calls the world’s first COVID health insurance product in February 2020, and now covers 3.5 million Indians for the infection.
India’s insurance penetration is in the low single digits, Goyal said in a video interview. The market was dominated by state-owned insurers, but private companies have recently gained market share, he said.
“The fintech segment is just moving into the spotlight,” Goyal said. “With India’s fast-expanding economy, general insurance has great growth potential.”