Amazon backed InsurTech Firm Acko Acquires Online Car Selling Startup vLer

Mumbai-headquartered Acko India, an insurance technology platform backed by Amazon, Accel and Flipkart co-founder Binny Bansal, has acquired vLer Technologies Pvt Ltd, an online car selling startup also headquartered in Mumbai, for an undisclosed amount, to get deeper into strengthening its auto insurance offerings.

With acquisition of vLer, Acko Insurance, which offers insurance products including motor insurance, in-trip domestic insurance and mobile insurance, will improve its offerings to customers and provide better customer satisfaction across the entire lifecycle of car purchase and usage.

Founded in 2016, by IIT Bombay almuni Sanjay Bharti and Jeevam Sirela, VLer helps customers purchase cars online. It provides car buyers a platform through an algorithm-based recommendation system, and dealer negotiations. Besides that it takes care of financing, insurance and other related paperwork after the deal is finalized.

Post acquisition, both the co-founders of vLer will be joining Acko Technology team.

vLer has also developed a recommendation engine which maps customers requirement with the cars available in the market to give them the best recommendations on choosing a particular car. With this, a typical urban customer doesn't have to go to dealers when thinking of buying cars but sit back and relax while vLer does the work of bringing the cars at doorstep.

"Insurtech is our core and major focus area. Our next steps on this are to track down various data points on customer behaviour, usage patterns to enhance insurance and underwriting technology. We believe with the domain expertise of VLer team, it will help us leverage this faster." said Ruchi Deepak, co-founder of Acko.

Founded in 2017 by Varun Dua, who is also founder & CEO of Coverfox.com, Acko Technologies is a parent company of Acko General Insurance. Acko follows an online-led model and hence all operations for the company are offered through the digital platform. The company received its license from the Insurance Regulatory and Development Authority of India (IRDAI) in September 2017 and in the same month raised the largest amount of seed round of $30 Mn before its launch in India.

In May last year, Amazon led $12 million funding round of Acko Technologies, marking Amazon's first investment in India’s insurance services sector.

To date, Acko General Insurance has raised a total of about $107 Mn in funding over three rounds from investors such as Amazon, Accel Partners, SAIF Partners, Catamaran Ventures and Binny Bansal, among others.

This Indian Startup Got $30 Million Even Before Its Launch

Imagine knowing that your movie is a hit even before it has hit the theatres. This is exactly what Varun Dua of Acko General Insurance is going through right now. Slated to launch in the last quarter of 2017, the Mumbai-based startup has already raised a whopping $30 million till now, which has caused a great commotion in the Indian startup ecosystem. Everyone wants to know how Dua achieved this unachievable feat and how can they replicate the same success.

Even before officaliy opening its shop, Acko General Insurance has managed to capture the interest of many high-profile investors who have not just shown interest but also shelled out a collective $30 million seed fund into the startup, which according to experts is the highest ever raised by a startup in India in its seed round.

Acko is the first startup in India to build an insurance business solely on a technology platform. It is basically a fintech startup, which when goes live will provide consumers insurance products that are affordable and relevant to them by tapping into its digital potential. The startup will be offering personalised products after measuring customer behaviour using data analytics.

Speaking to Economic Times, Dua decided to share some inside secrets about the world of insurance and what he's trying to achieve through Acko General Insurance.

First things first, if you envision on becoming the creme de la creme of your sector, you should understand the sector well. For instance, a MICA alumnus, Dua isn't new to the world of financial services business. He has previously worked with Tata AIG Life Insurance for nearly five years and has also co-founded online insurance brokerage company called Coverfox in 2013.

Dua believes, that as an insurer, one should as a rule know enough about the customer to understand the risk it is underwriting as your profitability is based on it. He firmly opinions that data is the key to getting the pricing right when it comes to the world of insurance.

What has made Acko even more attractive in the eyes of its investors is the fact that its digital-only model gets rid of the retail expenses of opening physical stores and even eliminates the dependence on a distribution network, aspects which are currently dominating rival insurance companies in the country.

Acko will function as an independent general insurance company with entire operations offered online. Dua is currently in the midst of getting all the necessary permissions for the same. It has already received R1 and R2 licence and is currently waiting for the final approval of R3 from the insurance authority.

According to Dua, one of the main reasons that prompted him to start on the Acko journey was the realisation that hit him one day that there was an open opportunity to look at the world wide web to introduce novel ways of pricing insurance products. He says,"It dawned on me that the scope in the area of building tech into the area of insurance is massive. "This ecosystem allowed one to create new product categories and introduce new ways of pricing them," he adds.

India currently houses a population of more than 1.2 bn people, out of which only 5 per cent are currently insured. Hence, insurance as a sector has a huge potential to grow and Acko aims to capitalise this opportunity as soon as possible and establish a brand name for itself in the industry. Considering the starting it has had, it is almost half way there.

Startup Insurance Company Acko General Insurance Raises $30M

Set-up by Varun Dua, previously founder of Coverfox, Acko General Insurance  has received it’s in principle regulatory clearance to launch a General Insurance business in India.

In a regulated business, Acko has raised $30mn, which in effect makes it one of the largest seed rounds for a startup in India. The company is backed by Narayan Murthy’s Catamaran Ventures, Venk Krishnan and Subba Rao of NuVentures, Kris Gopalakrishnan, Co-founder Infosys, Hemendra Kothari of DSP Blackrock, Atul Nishar – Founder & Chairman of Hexaware Technologies, Rajeev Gupta, veteran investment banker and Founder of Arpwood Capital,
Accel and SAIF Partners. More investors are slated to back the company, as active interest in the Insurtech sector plays out globally.
Acko will operate as an independent general insurance company with its entire operations offered through the digital platform. It will create products and deliver opportunities in areas where there are gaps such as personalized insurance products based on user consumption behaviors.

“Insurance world over and especially in India has massive opportunities harnessing technology for lower distribution costs, algorithmic customized pricing and automated claims. The opportunity is even wider if innovative products which are designed to be consumed online within the internet economy can be made to work in a way that customers find it relevant and easy to access”, said Varun Dua, Founder, Acko.

“With Acko we want to make insurance so straightforward that consumers don’t need to talk to multiple people to get advice or fill up forms. Consumers should be able to access low prices in one click based on their risk profile, and be confident that at a press of a button - their claim will get paid in the fastest possible time. In today’s connected world, we believe it can reach a point that the customer should get his claim without him even lodging it. Connectivity can make it possible and the ecosystem today exists to make it happen”, he added.

US, China and Europe have seen a funding blitzkrieg as technology disrupts the Insurance ecosystem. Oscar Health and Lemonade in the US and Zhong An in China have exploded to billion dollar valuations as the sector sees start-ups capturing niche markets, disrupting various parts of the value chain and focusing on millenials who need a simpler, customized and more transparent way of dealing with their insurance.