“Precaution is better than cure”, with this thought in similar fashion, the insurance aggregator POLICY BAZAAR plans to raise $150 million (about ₹ 1,100 crore) as Buffer Capital in the 3rd quarter of its current fiscal. Yashish Dahiya, Policybazaar.com Group CEO and co-founder, has a say here, although the company doesn’t require funds, it may raise some as a buffer for unforeseen events like this year’s pandemic.
In order to have provision for uncertain events the company plans to raise funds and the company would look to consolidate its operations, invest in customer service, and work towards capital efficiency as it approaches to bring back its pace into profitability in this fiscal year.
As there is a demand in the market for insurance products due to COVID-19 pandemic, Policy Bazaar expects a return to profitability and the business was also not affected negatively due to insurance sales, but the company requires capital in order to run the operations fearlessly without revenue for a period of time, says Yashish.
Claiming a growth between 70%-100% for the last year, the company expects to be profitable this year depending upon the insurance product. The company has not seen quite a good profit after 2018 and even despite booking losses, the company’s revenue jumped three-fold, while it doubled both market share and valuation at the end of FY20. Also this (growth in business) will help us to become profitable from this year onwards”.
Due to COVID-19 crisis demand for loans had come down significantly, so there is stress in the businesses of Paisabazaar.
CEO, Yashish said that during 2020-21, the company should log revenue of ₹ 1,100 crore and post a marginal profit. On the insurance premium side, he said the current fiscal would close with ₹ 6,000 crore as against ₹ 4,000 crore in FY20.
The company was in headlines due to its fundraiser of $130 million with Japanese behemoth Softbank, which was a part of its $200 million capital raise announced exactly two years ago. Also it has raised a total of $626.6 million in funding in 10 rounds. Their latest funding was raised on July 7, 2020 from a Secondary Market round.
Policy Bazaar.com does not require funds for expansion, this is a precautious move towards safety for the unpredictable events, like the current crisis and what if something else happens in the future?, he added, a million dollar fundraiser was made.