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Digital insurance company RenewBuy lands Rs 130 cr

Digital insurance company RenewBuy has raised Rs 130 crore in its latest round of equity financing, led by venture capital firm Lok Capital and IIFL Asset Management, an investment unit of financial services company IIFL Holdings. 

Amicus Capital, an existing investor, has also participated in the Series-B round, which comes after the Gurugram-based company got about Rs 60 crore in funding in October 2017. That transaction was led by Amicus Capital, the mid-market, growth-stage investment firm cofounded by former Carlyle Group managing director Mahesh Parasuraman. Investec acted as the financial advisor for the latest funding round.

RenewBuy founders will continue to hold about 40% in the company after the latest fundraising round, senior company executives told ET. The firm competes with the PolicyBazaar, and Coverfox.

RenewBuy will use the proceeds from the latest round to expand its network of insurance agents (currently at about 25,000), enter new markets, and add to its product portfolio, according to CEO Sekhar.

"This new round of funding will enable us to continue our momentum as the fastest growing, full-service digital insurance platform in India... Our competitive advantage of being a capital-efficient business model will enable us to turn profitable within the next 24 months," Sekhar said. 

RenewBuy claims to have undertaken Rs 500 crore in annualised premiums, and is present in 450 cities across the country. The company is targeting having a presence across 1,000 towns and cities, increasing agent network to 200,000, and 10 million customers by 2022. 

"By 2020, around 650 million Indians will be online, and every aspect of their life will be digital. RenewBuy.com has created one of the most cost efficient, customer-centric models through its proprietary end-to-end digital insurance platform and has digitised the entire insurance value chain," said Prashasta Seth, senior managing partner at IIFL AMC. 

This is the latest transaction in the country's online digital insurance sector, which has continued to raise cash from risk capital investors, driven by the potential of a market where only a low percentage of citizens have access to insurance.