Startup spotlight: Acko, India’s next insurtech unicorn?
Acko is an insurtech that’s seeking to rehabilitate the public’s conception of a general insurance company. Instead of “beige walls and bleak souls”, the company strives to promote a “vibrant and vivacious” image that has the potential to change lives.
Founded in 2016 and headquartered in Mumbai, Acko uses a digital-first approach to make vehicle and health insurance easy, with zero commission and zero paperwork. Other benefits of the platform include:
- Low premiums
- A 100% digital process to speed up services
- Claims can be settled online or over the phone
Meeting unmet needs with technology
When Acko first started, the website states, it was a team of just six people. Now, the company employs more than 400 and has sold insurance products to over 50 million people.
Along the way, it has also forged partnerships with a number of leading companies, such as Amazon, OYO, and Ola. The latter, a ridesharing company, drives Acko’s microinsurance offering Ola Trip Insurance, which provides coverage to taxi passengers. An innovative use of technology to address a previously unmet need, it won the Golden Peacock Innovative Product award in 2019.
This creativity has paid dividends so far and could be about to take the company to new heights.
India’s next insurtech unicorn?
Since 2017, Acko has initiated six funding rounds (a seed round, Series A to D, and a venture round) generating a total of US$215mn. Now, according to the Economic Times, it could be poised to add a further $200mn to that total through a major deal with General Atlantic and Multiples Alternate Asset Management, among others.
Successfully striking an agreement would send Acko’s value over $1bn and grant it unicorn status, still a relatively rare feat for insurtechs.
So far, neither Varun Dua nor Ruchi Deepak (both Co-Founders) have provided direct comment. However, with insurtech adoption still rising among customers as a fast and easy alternative to traditional methods, it’s not inconceivable that Acko will succeed in securing funding for its highly popular platform.
Image source: Acko
CB Insights: US Insurtechs Are Competing In A Global Market
In the first half of the year, insurtech companies around the world have raised US$7.4bn, nearly doubling their funding in Q2. According to Digital Insurance, insurtechs have raised US$4.8bn in Q2—an 89% increase in funding from Q1. But US firms are no longer the sole beneficiaries.
What Are the Stats?
Out of the 15 Q2 mega-rounds—those that top US$100mn—only eight included American firms. Pretty good, you might say. That’s over half! But US companies only made up 38% of the deals, which marks a 10% drop from Q1 and a 12% drop from 2020. Technically, therefore, US insurtechs are less influential than they’ve been in the past. But who says this is a bad development?
Despite my American citizenship, I’d argue that a more globally diverse insurance market is only for the best. Many of the world’s citizens who could most benefit from improved insurance services live outside of the States—and deserve local, tech-savvy services.
Why Does This Matter?
You’re always going to see the typical insurtech contenders from Western countries. For instance:
- German-based wefox: US$650mn Series C
- UK-based Bought By Many: US$350mn Series D
- US-based Collective Health: US$280mn Series F
But it’s critical that we address risk across the world. American insurtechs might be some of the most technologically skilled firms in the industry, but it’s not their first goal to address floods in Southeast Asia, crop destruction in China, and COVID complications in South Africa. That’s why we should celebrate that the recent Q2 round included insurtechs from 35 different countries.
According to CB Insights’ Q2 2021 Quarterly InsurTech Briefing, this was the first time that they’d observed insurtech activity in Botswana, Mali, Romania, Saudi Arabia, and Turkey. And ‘from a product, service, distribution, and underlying risk perspective, we—as a society and as an industry—are moving at an unprecedented speed’, says Dr. Andrew Johnston, Global Head of Willis Re InsurTech.
Just ask CB Insights. InsurTech value propositions have resonated with the world.