For more than half a decade, Zopper has built a platform for small and medium businesses, helping merchants invoice and pay through its point-of-sale platform. He sold that IP address to PhonePe in mid-2018, but instead of joining the fintech giant, Zopper worked on a new venture from the ground up and independent of PhonePe. That firm, an insurance infrastructure API platform, said on Tuesday it raised $75 million in new funding.
The New Delhi-based startup’s Series C funding was led by Creaegis. ICICI Venture and Bessemer Venture Partners as well as existing backer Blume Ventures also participated in the funding, the startup said. Zopper, an 11-year-old startup, has raised $96 million to date. It did not disclose the valuation at which it closed the round.
Zopper works with insurers and creates custom byte-sized products that it then provides to distribution partners. This approach differentiates Zopper from many of its competitors in India who bundle blankets from different manufacturers and attempt to cut distributors and reach consumers directly.
“If you look at insurance penetration in India today, it’s just 3-4%,” said Surjendu Kuila, founder and CEO of Zopper, in an interview. “If you’re trying to bring new people into the insurance fold, you just can’t sell them plans that are priced more than $37 to $50 a year. »
Offering customers slices of insurance coverage in smaller sachets has also not been successful, as there is no margin for anyone to make money, he said.
Zopper tries to solve this problem by partnering with banks, non-bank financial institutions, retail chains, mobility companies that already have a captive customer base. “These partners need an insurance platform, and that’s what we provide,” he said.
Kuila claimed that no other company takes this approach and therefore has not been able to reduce its cost of customer acquisition. “That’s why even Policybazaar [online insurance aggregator that became a public company last year] is not profitable,” he said. Zopper, on the other hand, has been profitable for more than 18 months, he said.
“Our thesis from the first days was clear: there is already an infrastructure. Someone has incurred capital expenditures to build this infrastructure. So why don’t we use technology to streamline this instead of creating everything from scratch,” he said.
Zopper currently has a presence in over 1,200 Indian cities and has partnered with over 150 industry players, including retail group Metaverse Marketingverse Marketing, startup Ola, retail chain Croma, phone maker Xiaomi, Japanese conglomerate Hitachi and Equitas Small Finance Bank.
“We truly believe in Zopper’s vision to transform and automate the insurance distribution model in India. Over the years, they have demonstrated their value of technological and product innovation to their ecosystem partners and insurers,” said Prakash Parthasarathy, Managing Partner at Creaegis, in a statement.
“All of this has been achieved in a very capital efficient manner and our investment will help its accomplished management team led by Surjendu and Mayank to evolve and improve access to a wider customer base.” We are privileged to be their partner and we are committed to supporting their journey given our experience in this space.
The startup plans to deploy the new funds to significantly increase its workforce and also explore opportunities to acquire smaller startups, Kuila said. He is in no hurry to go public. He said Zopper initially aims to reach nearly $1 billion in revenue and over the course of about five years will file an initial public offering.
The startup’s sale of its previous business to PhonePe has been misreported by many as its acquisition by some news outlets. Kuila said PhonePe never held a stake in Zopper and the startup, which counts Tiger Global among its backers, continues to be supported by its early backers and new investors.
“Given ICICI Venture’s successful investment track record in the insurance industry, we believe Zopper is well positioned to seize this long-term growth opportunity,” said Gagandeep S Chhina, Chief Private Equity Officer. at ICICI Venture, a company that has started investing in local businesses. over 30 years ago. ” We are delighted to support the management team’s vision to make Zopper a major player in Insurtech through its scalable technology, multiple tie-ups with insurers and partnerships with distribution channels across all industries.