Amazon invests $12 mn in Indian insurance start-up Acko

• Amazon led a new round of funding for Acko, a digital insurance startup.
• Acko’s main competition comes from sites like PolicyBachat, PolicyBazaar and Easypolicy.
  
• Flipkart, Amazon’s primary challenger in the Indian market, has its own insurance portal called Sabin Advisors.

After losing out on its offer to buy 60% stake in Flipkart, Amazon continues undeterred with its investments in India. The company is restarting its efforts by investing in Acko, a digital insurance startup based in the country. In its new round of funding, Acko managed to raise ₹809 million ($12 million) and also brought on a new investor, Ashish Dhawan, the founder of a private equity firm called ChrysCap.

Reports of the US retail giant backing the startup have been brewing since January this year. Earlier, it was speculated that Amazon would come on board as a part of a new financing round of a total of ₹1 billion ($15 million). The actual amount may not be the complete billion, but it does bring Acko’s grand total up to ₹2.8 billion ($42 million). Not to mention, it’s the first investment by Amazon in India’s insurance sector.

Founded by Varun Dua, one of the co-founders of Coverfox (an insurance comparison site), Acko’s main competition comes from sites like PolicyBachat, PolicyBazaar, Easypolicy and PolicyX.com. At this point, they’re all generating more revenue than Acko.

To its credit, it did partner with Ola in April earlier this year to provide an ‘in-trip insurance’ program. Regardless of whether users chose to ride a cab, auto or e-rickshaw, users could opt-in for insurance that would cover the loss of property, medical expenses, ambulance transportation cover etc. The company claimed it was the first of its kind.

In the future, it’s possible that Amazon is looking to bring those financial products to retail consumers as well. That’s probably one of the reasons why Flipkart was interested in investing in Acko as well, but the deal seems to have landed in Amazon’s lap instead.

That isn’t to say that Flipkart isn’t getting into insurance as well. The company was recently acquired by Walmart, and had earlier set up its own insurance business and venture capital funding called ‘Sabin Advisors’ in December, last year.

Acko already has backers like Catamaran Ventures, Hemendra Kothari of DSP Blackrock and Accel Partners, among others. The plan is that the company’s interface will completely be online, but for insurance claims there will operate offline centres.