According to reports, InsuranceDekho, an insurance broker based in Gurugram, is in negotiations to buy out its rival company Renewbuy in a share swap arrangement, which would be a significant consolidation event in the insurance distribution industry.
Renewbuy will be combined with InsuranceDekho as part of the agreement, and the former will be worth between $350 and $360 million. Tracxn claims that in October 2023, after raising $60 million from TVS Capital, Mitsubishi UFJ Financial Group, and other sources, InsuranceDekho was last valued at $600 million.
According to the individual with knowledge of the negotiations, Renewbuy's investors will receive shares in InsuranceDekho in proportion to the valuation of both businesses through the merger.
"The specific details of the transaction are still being finalized, but through the secondary sale of their shares, some of Renewbuy's original investors may receive a full or partial exit," he continued.
The value of the shares in a secondary share sale is distributed to the shareholders rather than the business.
According to the source, "the deal will bring together the agent network of both companies, undertaking a major consolidation in the insurance distribution business."
The Insurance Regulatory and Development Authority (IRDAI) must approve the purchase, according to the individual cited above. "It will be decided later whether the two entities continue to operate as independent business or they merge into one brand."
A turf war is brewing between companies like PB Partners, a division of listed insurance giant Policybazaar, InsuranceDekho, which split off from used car platform Cardekho, Turtlemint, backed by Nexus Venture Partners, and Renewbuy. This will be a significant event in the insurtech sector.
Back in October 2023, Agrawal of InsuranceDekho told ET that he was looking for inorganic expansion prospects and hoped to close some takeover possibilities. At the time, the company stated that it had approximately 1.1 lakh field agents and aimed to treble that number within the next 12 months.
These organizations are all involved in the point of sale (PoSP) industry, in which insurance brokers designate their own representatives to market insurance goods to consumers nationwide, including health, life, auto, and term insurance.
Given that the well-capitalized Policybazaar is actively vying for market share, the third party stated that "the acquisition makes sense for InsuranceDekho since it will get a major boost in terms of its physical network of agents and help create a very strong player in this area."
