Gurugram-based insurance broker InsuranceDekho is reportedly in discussions to acquire its smaller competitor, RenewBuy, in a predominantly share-swap arrangement, signaling a significant consolidation in the insurance distribution market, according to sources familiar with the matter.

RenewBuy is expected to be valued at approximately USD 350 million. At the same time, InsuranceDekho is pegged at around USD 600 million, resulting in a combined valuation close to USD 1 billion for the merged entity, one source revealed.

Under the proposed terms, RenewBuy’s investors would receive shares in InsuranceDekho proportionate to each company's valuation, another source added. RenewBuy’s investors include major firms such as Japanese insurer Dai-ichi Life Holdings, private equity fund Apis Growth, Lok Capital, and IIFL Asset Management Company. So far, RenewBuy has raised a total of USD 141 million, per data from Tracxn. It is anticipated that some of the early investors and angel backers may choose to partially or fully exit through secondary share sales, where transaction proceeds go directly to existing investors instead of the company.

Email requests for comments to RenewBuy and InsuranceDekho went unanswered as of Sunday.

Following the merger, the agent networks of both companies are expected to combine, facilitating a large-scale consolidation within the insurance distribution sector, a third source stated. The merger would bring RenewBuy's CEO, Balachander Sekhar, alongside InsuranceDekho CEO Ankit Agrawal to jointly lead the new entity.

A decision on whether the two brands will continue as independent entities or merge under a single brand is yet to be made, as regulatory approval from the Insurance Regulatory and Development Authority (IRDAI) will also be required, the source added.

This development arises amid intensifying competition in the insurance distribution market, with players like PB Partners (Policybazaar's distribution arm), InsuranceDekho (formerly part of CarDekho), Nexus Venture Partners-backed Turtlemint, and RenewBuy vying for market share.

In October 2023, Agrawal mentioned that InsuranceDekho was exploring acquisitions for inorganic growth and anticipated closing several deals. At that time, the company reported approximately 1.1 lakh field agents and aimed to double its agent network within a year. Financial reports from Tracxn indicate that InsuranceDekho achieved net revenue of Rs 100 crore for FY 2023, alongside a net loss of Rs 51.6 crore. The company has raised USD 310 million in equity funding to date, with key investors including Mitsubishi UFJ Financial Group, TVS Capital, and Goldman Sachs Asset Management.

These insurance platforms operate in the point-of-sales-person (PoSP) sector, where brokers appoint agents to sell a variety of insurance products, including health, life, motor, and term policies, across India.

“This acquisition is a strategic move for InsuranceDekho, strengthening its agent network and positioning it as a formidable competitor, especially as Policybazaar actively pursues market share with significant capital backing,” the source explained.

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