Virat Kohli-backed insurtech platform Digit Insurance plans to raise $500 mn in IPO
- ByStartupStory | May 28, 2022
Digit Insurance, a Bengaluru-based insurtech business, is allegedly considering raising $500 million through an initial public offering (IPO). The insurtech startup, which is backed by Virat Kohli (who is also a brand ambassador for Digit) and high-profile investors like Sequoia Capital, A91 Partners, Faring Capital, and billionaire Prem Watsa’s Fairfax Group, will seek a valuation of $4.5-5 billion in its initial public offering.
Digit will become the second Indian insurtech unicorn to go public after Policybazaar. Digit Insurance, founded in 2017 by Kamesh Goyal, offers insurance plans in a variety of areas, including health, auto, travel, smartphones, and commercial assets such as stores and vacation homes. According to Digit’s website, it has served more than 20 million consumers in the car, bike, health, and travel insurance divisions.
Morgan Standley and ICICI Securities have been recruited as book-runners for the deal by Digit Insurance. By September, the insurance startup expects to publish its draught red herring prospectus (DRHP) and list it on exchanges by January 2023. Digit raised Rs 121 Cr in a fundraising round last year, valuing the company at $4 billion. It has so far raised around $400 million from investors.
The business will file its DRHP in September, as the Insurance Regulatory and Development Authority of India (IRDAI) requires insurtech companies to be at least 5 years old before going public. By then, Digit, which was created in October 2017, will have met this condition. The insurtech unicorn intends to raise money by issuing new shares, while Fairfax, the company’s largest shareholder with a 30% position, will lower its stake.
Non-life insurance penetration in India was only 0.94% in FY21, according to IRDAI data, up from only 0.56% two decades before. Digit is addressing this massive, untapped market, which has the potential to pay off handsomely as insurance knowledge and awareness rise. In FY22, Digit Insurance’s net premiums increased by 75% to Rs 3,404.21 crore, up from Rs 1,903.69 crore the previous fiscal. At the same time, Digit’s operating losses increased by 102% to Rs 375.16 Cr, up from Rs 185.49 Cr in FY21.
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