Paytm may acquire insurance marketplace Coverfox for around $120 million

Paytm may acquire insurance marketplace Coverfox for around $120 million

Paytm is likely to acquire Mumbai-based digital insurance marketplace Coverfox in an all-cash deal for around $100-120 million. The digital payments company is reportedly in talks with Coverfox. If the deal goes through, it will be the largest acquisition for Paytm as the company is trying to make headway into the financial services segment through its subsidiary Paytm Money.

“The Paytm board is in the process of finalising the contours of the deal. There is still a chance that it may fall through as the board deliberates on the pros and cons of the transaction,” a source told the Economic Times.

The deal will also enable Paytm emerge as a direct competitor to country’s largest online insurance marketplace PolicyBazaar. However, the proposed acquisition might have to face opposition from SoftBank as the Japanese investment giant also owns a significant stake in PolicyBazaar, the news daily reported.

The company reportedly is also in talks to raise a $50 million series D round as the acquisition talks with Paytm have been carried on in parallel.

Founded in the year 2013 Coverfox currently offers life and non-life insurance policies across 45 insurers. The company also boasts of a network of 50,000 agents. The Mumbai-based company has SAIF Partners, NR Narayana Murthy’s Catamaran Ventures, Accel Partners and International Finance Corporation amongst its investors.

Coverfox sold $100 million worth of premiums generating $22 million in revenue with a million transactions done in 2018.

The company logged a revenue of Rs 12.42 crore in FY18 as against Rs 6.12 crore in FY17.