Published On : 2019-06-03
In a major development, Paytm is expected to acquire Coverfox, Mumbai-based digital marketplace for a deal of around $100-120 Mn. According to the sources, it will be an all-cash deal and e-commerce payment system is apparently in talks with Coverfox. If the deal is officially accepted, it would be the largest ever acquisition for Paytm, as the company is all set to go forward into the segment of financial services with the help of its subordinate Paytm Money.
A confidential source told a renowned media house based in India that the Paytm board was under the process of finalizing the outline of the deal. “There may be a chance that the deal would fail as Paytm management is still considering the advantages and disadvantages of the transaction,” explained a source .
Paytm to Emerge as Direct Competitor to PolicyBazaar
Reportedly, if this deal will go through then Paytm can arise as a direct competitor to PolicyBazaar, the country’s largest online insurance marketplace. Nevertheless, this planned acquisition may face opposition from Japanese giant SoftBank as they have a remarkable stake in PolicyBazaar. The company apparently is also in negotiations to increase a $50 Mn series D round as the acquisition talks have been carried on in parallel with Paytm.
Paytm has significant data on consumer transaction and behavior pattern. It will control the power of data in cross-selling insurance. For example, if a consumer buys an iPhone with the help of Paytm Mall or any other stores but will pay through UPI or Paytm Wallet, it understands that you are expected to insure it.
Coverfox is founded in the year 2013 and is presently provides non-life and life insurance policies through 45 insurers. The company also claims the network of around 50,000 agents. International Finance Corporation, SAIF Partners, Accel Partners, and Catamaran Ventures are some of the investors of this Mumbai-based company.
In 2018, Coverfox sold premiums of nearly worth $ 100 Mn that has generated $22 Mn revenue. The company has registered a revenue of more than Rs 12 crore in FY 18 as against Rs 6.12 crores in FY17
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