General insurer, Digit becomes 2021’s first Indian Unicorn at $1.9B valuation

Source: Entrepreneur

Digit Insurance is a general insurance company that also deals with other financial services. The Bengaluru-based start-up has become India’s first Unicorn company in 2021 with a concluding valuation of USD 1.9 billion.

The general insurance company does not deal with life insurance policies and is backed by Chief Executive Officer of Fairfax Financial Holdings, Prem Watsa along with other investors as well.

The general insurer has recently raised funds worth INR 135 crore in Venture round led by existing investors including TVS Capital, A91 Partners and Faering Capital. This latest infusion of funds valued the company at USD 1.9 billion.

It is also noteworthy to mention that Digit has become the second insurance technology start-up after Policybazaar to enter the prestigious Unicorn Club.

Having said that, 2020 has been a tough year for the country’s economy and overall businesses. The COVID-19 pandemic has successfully generated demand for health insurance which has consequently led to the growth of general insurance in the current Financial Year. As mentioned in a report by Economic Times, the Indian automobile market, travel industry, hospitality industry among many others have been deeply impacted as everyone was legally bound to stay within the boundaries of their houses.

Kamesh Goyal, founder, Digit exclusively spoke to Economic Times where he mentions that the capital infusion was primarily to increase the solvency ratio to comply with IRDAI’s (Insurance Regulatory and Development Authority of India) norms.

The IRDAI norms consist of a condition that insurance companies must maintain a minimum 150% of solvency ratio.

As reported by Economic Times, following the funding, the three investors i.e., A91 Partners, TVS Capital Funds and Faering Capital have increased their combined shareholding by 1% to a total of 11% whereas the majority stake of the remaining 88% is held by Canada-based Prem Watsa and founder Kamesh Goyal himself.

The report further mentions that Goyal expects Digit to pick up growth in 2021 after the COVID-19 outbreak months of 2020. He anticipates that Digit will grow faster than the rest of the industry.

He further added that Digit will continue to lay emphasis on liability, health, motor, property and other corporate-based insurance. In 2021, the insurance technology start-up is looking forward to expanding its footprints in shopkeeper insurance and merchant insurance segment.

According to the company profile on CrunchBase, Digit Insurance has till date raised total funding worth USD 179 million in over three financing rounds.

The start-up has also only acquired one company, ITI Reinsurance Limited for USD 72.8 million, back in 2018.