(Bloomberg) -- Tencent Holdings Ltd. has acquired a minority stake in Policybazaar.com valuing the Indian online insurance aggregator at $1.5 billion, according to a person familiar with the deal, as it tries to get a foothold in the country’s burgeoning insurance sector.
The Chinese technology giant bought 10% of Policybazaar, half of Tiger Global Management LLC’s stake in the company, the person said, asking not be identified as the matter was not public. The $150 million deal was signed earlier this week, the person added.
Tencent, known for its dominant WeChat messenger app, has been an aggressive investor in Indian startups. It’s thrown its might behind prominent technology companies including ride-hailing service Ola, education platform Byju’s and food delivery platform Swiggy. The Shenzhen-headquartered company has been a recent entrant to the booming fintech sector, investing in digital banking services startup NiYo Solutions earlier this year.
Policybazaar declined to comment and Tencent did not immediately respond to calls and an email seeking comment. Tiger Global also did not reply to emails seeking a response.
Policybazaar, operated by ETech Aces Marketing and Consulting Pvt., is among startups seeking to disrupt the dominance of state-owned or bank-promoted insurers in a sector with tight regulatory controls. It allows users to compare and buy life, health or auto insurance policies directly on its website, without any intermediaries.
India’s insurance market has massive potential as the country of 1.3 billion is mostly un-insured or under-insured. Insurance penetration was estimated to surpass 4% in 2017 and projected to quadruple over the next 10 years from $60 billion, according to the government’s Brand Equity Foundation.
Indian conglomerates including Tata Group and Aditya Birla Group are prominent players in the insurance market and technology giants including Amazon.com Inc. have backed insurance startups.
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