Digit insurance, a Bengaluru-based general insurance company is simplifying the way insurance products are viewed, purchased and claimed. It mainly offers health, car, bike and travel insurances with a pretty transparent and basic understanding of insurance policies.
Recent Fundraising and Current Valuation
In an initial funding round in January 2021, the Fairfax-backed startup raised $18 million making it valued at $1.9 billion. After this round of funding, the startup became the first one to enter the Unicorn club in 2021. The company had raised $18.5 billion from its existing investors Faering, A91 Partners and TVS in January.
In its latest round of funding from existing investors Faering Capital as well as some new investors Sequoia Capital India and IIFL Alternate Asset Managers, the startup is raising $200 million. After this funding round, the company’s valuation will be doubled to $3.5 billion.
One of the biggest funding rounds in the Indian insurance sector, this funding round will take Digit’s total capital infusion to $442 million since its inception in October 2017. With this current valuation, Digit is India’s third most valuable Fintech startup leaving behind the big names like Razorpay and Pine Labs which were valued at $3 billion each earlier this year.
Why is Digit Raising Funds?
The major reason behind raising funds is to maintain solvency with an equity dilution of 5% in the recent fundraise. They will continue with their major focus being on simplifying insurance processes and increasing insurance penetration with the help of technology.
The major source of revenue is Digit’s Motor Insurance category. It brings around 75% of gross premiums. In the pandemic, the share of travel insurance fell but at the same time health insurance started rising up.
With this fundraising, it will incorporate newer health covering services in the account of a potential third wave of COVID-19 in India. The company is also planning to increase its Indian geography, expanding to tier II and tier III cities.
One of the biggest funding rounds in the Indian insurance sector, this funding round will take Digit’s total capital infusion to $442 million since its inception in October 2017.
What made Digit a Successful Insurance Tech Startup?
The startup provides customers with pretty basic and transparent insurance solutions. Some of Digit’s relevant products are:
- SME buddy, a consultant tool, helps users to pick the best insurance coverage for their businesses.
- Home Loan Calculator is a tool that enables users to calculate their EMIs for their home loans in a feasible manner.
- Insurance Dictionary is a one-of-its-kind tool that focuses on simplifying the complicated insurance related terms for general public.
In the pandemic, it has also come up with COVID-19 Symptoms Checker easing up the checking of risks or symptoms of corona. All these simple processes, a tech-enabled and customer centric approach make this company stand out in the market.
Takeaways For Insurance Startups
As awareness regarding the insurance industry grows, the market for startups like these will prove lucrative. The pandemic has drawn people’s attention towards having health insurances and this is where Digit aces the game.
Digit is using technology based products to simplify the insurance processes for its customers. It has smartphone-enabled self-inspection and audio claims, fully cloud-based platform and is constantly launching relevant offerings for its customers.