For more than half a decade, Zopper has built a platform for small and medium-sized businesses, helping merchants with invoicing and payments through its point-of-sale platform. It sold that IP to PhonePe in mid-2018, but instead of joining the fintech giant, Zopper is working on a new venture from scratch and independent of PhonePe. The business, an API platform for insurance infrastructure, said Tuesday it raised $75 million in new funding.
Creages led the New Delhi-headquartered startup’s Series C funding. Existing backer Bloom Ventures also participated in the funding, along with ICICI Venture and Bessemer Venture Partners, the startup said. Zopar, 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 insurance providers and creates bite-sized, personalized products that it supplies to distribution partners. This approach differentiates Zopar from many of its competitors in India, which combine coverages from different manufacturers and try to reach consumers directly, cutting out distributors.
“If you look at insurance penetration in India today, it is only 3 to 4%,” Zopar founder and chief executive Surjendu Kuila said in an interview. “If you’re trying to get new people under insurance, you can’t sell them plans that cost more than $37 to $50 a year.”
Even offering insurance coverages in small sachets to consumers has not been successful because there is no margin for anyone to make money, he said.
Zopper is trying to solve this by partnering with banks, non-banking financial institutions, retail chains, and mobility companies that already have a captive customer base. “These partners need an insurance platform, and we provide that,” he said.
Kuila claimed that no other company was following this approach and thus was unable to reduce their customer acquisition cost. “Policybazaar is also the reason for that [online insurance aggregator that became a public company last year] Not profitable,” he said. Zopar, in contrast, has been profitable for more than 18 months, he said.
“Our thesis from the early days was clear: the infrastructure was already there. Someone poured the capital outlay to build that infrastructure. So why not use technology to streamline it instead of creating everything from scratch,” he said.
Zopper currently has a presence in 1,200 Indian cities and has partnered with over 150 players in the industry, including retail group Amazon, ride-hailing startup Ola, retail chain Croma, phonemaker Xiaomi, Japanese conglomerate Hitachi and Equitas Small Finance Bank.
“We truly believe in Zopar’s vision to transform and automate the insurance distribution model in India. Over the years, they have demonstrated the value of their technology and product innovation to their ecosystem partners and insurers,” Creegis managing partner Prakash Parthasarathy said in a statement.
“All 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 scale and enhance its broad customer base. We are privileged to be their partner and we are committed to support their journey based on our experience in this space. “
Kuila said the startup plans to use the fresh funding to significantly scale its workforce and explore opportunities to acquire smaller startups. It’s in no rush to go public. Zopper initially aims to reach about $1 billion in revenue and will file for an initial public offering in about five years, he said.
Several news outlets have mistakenly reported the startup selling its previous business to PhonePe as the acquisition. Kuila said PhonePe never held any stake in Zopper and the startup, which counts Tiger Global among its backers, will continue to be supported by its early backers and new investors.
“Given ICICI Venture’s successful investment track record in the insurance sector, we believe Jopar is well positioned to capture this long-term growth opportunity,” said Gagandeep S China, director, private equity at ICICI Ventures, which has started investing in local companies. 30 years ago. “We are excited to support the management team’s vision to establish Zopar as a leading insurtech player with scalable technology, multiple insurer tie-ups and partnerships with distribution channels across sectors.