Incoming investors include Enam group’s family office led by Akash Bhanshali, CaratLane founder Mithun Sacheti, Arpwood Capital and public market veteran Madhusudan Kela of MK Ventures, people familiar with the development told ET.
Existing shareholder private equity major General Atlantic will also shore up its position by acquiring additional stake, one of the persons said.
Acko, which was valued at $1.4 billion post its last funding round, is executing the secondary sale at around 5-10% discount, these people said on condition of anonymity as the talks are private.
Foreign shareholding limit in the Indian insurance industry is 74%.
Discover the stories of your interest
Emailed queries to Acko, Catamaran, Dhawan, Sacheti, Enam group and General Atlantic remained unanswered till press time Tuesday.
Secondary share sales directed towards providing exits to early investors while bringing in domestic investors familiar with the Indian public markets is a recurring theme among startups. Lenskart, Meesho, Purplle, OfBusiness, among many others, have facilitated big secondary deals over the past year.
Companies that are planning to tap the IPO market over the next year or so are especially looking at these public market-focused investors to help them prepare for their listings.
Catamaran first invested in Acko in 2016 when the company raised a large seed round of $30 million after spinning off from Coverfox, an online insurance marketplace. The fund currently holds around 2.2% in the company and is expected to sell most of its shares in the secondary round.
In a secondary share sale, the proceeds of the transaction go to the investors selling their stakes and not to the company.
Also Read | Insurtech startup Acko aims to achieve profitability by fiscal year 2027
Dhawan, who first invested in Acko six years ago in his personal capacity, currently owns 1.3% in the company, data from Tracxn showed.
General Atlantic is its largest shareholder in the insurance firm with 20.6% stake, followed by Accel with 8.9% and Elevation Capital with 6.3% stake.
Acko had last raised $137 million in 2023 from the likes of Multiples Alternate Asset Management and Lightspeed.
The company offers vehicle insurance, travel insurance and health cover among other products.
Last year, Acko received a licence for operating a life insurance business from the regulator and has started offering term life products. It recently appointed Sandip Goenka as its chief executive officer for its life business.
According to industry data, Acko has collected Rs 1,041 crore in general insurance premium till September this year, up 19% year on year.
In the financial year ended March 31, 2023, Acko reported a total revenue of Rs 1,796 crore and a net loss of Rs 738 crore. The Bengaluru-based company is yet to file its fiscal 2024 financials.
The company aims to turn in profits by FY27 on the back of its general and health insurance segments turning positive, as per a report by investment bank UBS Global.
One of Acko’s closest competitors, Go Digit General Insurance went public earlier this year and is currently trading at a market capitalisation of Rs 32,000 crore ($3.8 billion).
As of September, Go Digit had collected a premium worth Rs 4,376 crore in its general insurance business and commands around 11% market share in the industry. The company reported a net profit of Rs 101 crore in the June quarter of the current fiscal.