Paytm is in talks to acquire insurance marketplace Coverfox for USD 100-120 million in an all-cash deal, Economic Times reported citing two people in the know.
As of now, Policy Bazaar is India’s biggest player in the insurance marketplace. If the deal goes through, it might lead to a conflict of interest as SoftBank Vision Fund has positions in Paytm as well as Policy Bazaar.
“The Paytm board is in the process of finalising the contours of the deal," the source told Economic Times.
“There is still a chance that it may fall through as the board deliberates on the pros and cons of the transaction,” he added.
Varun Dua and Devendra Rane founded Coverfox in 2013. The existing investors of the company include SAIF Partners, Accel Partners, Catamaran Ventures and International Finance Corporation.
Coverfox Insurance has raised a total of USD 41.5 million from three rounds of funding. The latest funding happened in March last year. While the acquisition talks is going on, the company has been looking to raise a USD 50 million in series D round parallely, another source told ET.
According to Crunchbase, Coverfox Insurance has USD 2.5 million in estimated revenue annually and competes with Policy Bazaar, PolicyBoss, and MintWise.
One97 Communications launched Paytm Money in September 2018 targeting online mutual funds market. Paytm has acquired 11 organisations, the most recent being Balance on Aug 9, 2018.
Paytm Money has claimed 1 million user milestone six months into the launch.
Paytm founder Vijay Shekhar Sharma had earlier said insurance is a big area of focus for the company. Paytm is already a registered corporate agent for all forms of insurance products as per the Insurance Regulatory and Development Authority of India. The company is looking to go deep into the financial services space as its digital payment business is facing tailwinds.