UK's Apis Partners and others invest $45 million in RenewBuy

Apis Partners LLP of the UK, Lok Capital and IIFL Asset Management have together invested $45 million (about Rs 330 crore) in RenewBuy, marking the biggest capital commitment to the digital insurance marketplace to help it compete with market leader Policybazaar.

This is RenewBuy's third round of equity raising. The company plans to upgrade its technology capabilities to expand its customer base 10 times to around 25 million in the next five years. Policybazaar currently has over 11 million customers.

Apis pumped in about Rs 290 crore in the company through primary and secondary share sales, while Lok Capital and IIFL Asset Management have put in Rs 20 crore each in fresh equities. Lok and IIFL are existing investors in RenewBuy. The deals have been concluded Thursday.

The next five years will be a phase of exponential growth for the company, said RenewBuy chief executive Balachander Sekhar. “We will use the capital to improve our technology backbone, develop AI-driven customer support and claim settlement systems and expand the agent base. We are taking insurance to the remotest part of the country with an estimated 2 lakh insurance advisors in five years, to those who have traditionally been under-served,” Sekhar told ET.

India’s insurance penetration rose to 3.76% in 2019 from 2.71% in 2001, but it is much lower when compared to Asian economies such as Malaysia, Thailand and China - at 4.72%, 4.99% and 4.30% respectively.

Founded in 2015 by Sekhar and Indraneel Chatterjee, RenewBuy sells third-party motor, health and life insurance products, mostly in semi-urban and rural pockets, through its subsidiary D2C Insurance Broking.

The company catered to 2.5 million customers from across 650 cities and towns and has about 50,000 agents. It collected a premium of nearly Rs 700 crore in FY21, which was 25% more than the previous fiscal.

“We tend to back entrepreneurs. We primarily invest in a firm for 3-5 years,” said Udayan Goyal, co-founder and managing partner at Apis, which supports financial services and financial infrastructure businesses.

Founded a year before RenewBuy, Apis has investments in Star Health Insurance, non-bank lender Hero FinCorp, banking technology firm Cashfree and ATM deployment firm EPS.

“We are already a partner in the manufacturing side of insurance through Star Health. Now through investment in RenewBuy, we are in the insurance distribution value chain,” Goyal said.

Apis Growth Fund II, a private equity fund managed by Apis Partners made the investment. Out of Rs 290 crore, Rs 240 crore is done by subscribing to fresh issue of shares by RenewBuy and the balance Rs 50 crore is through secondary sales.

ET first highlighted RenewBuy's equity raising plan on December 23 last year.

“Some of the early stage individual investors exited in this round”, Sekhar said.