Paytm, the Indian payments company backed by SoftBank, is reportedly started discussions to buy Coverfox, the Indian insurance marketplace.
Paytm has recently shown lots of interests ih Home grown Mumbai-based digital insurance marketplace Coverfox in an all-cash deal for around $100-120 million. The digital payments company is reportedly in initial stages of negotiations with Coverfox. If the deal goes successful, it will be the largest acquisition for Paytm as the company is eyeing for a big bang entry into the financial services sector 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.
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The rumored acquisition deal will also give boost and empower Paytm to transform into a direct competitor to India’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, as per the sources reported.
The company is also hunting for new round of funding and also is in talks to raise a $50 million series D round as the acquisition talks with Paytm have been carried on a simultaneous basis.
As per the reports Coverfox was founded in the year 2013 and 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 among its investors.
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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 Financial year 2018 as against Rs 6.12 crore in Financial year 2017.