The vast majority of people in India, the second most populous country in the world, do not have health insurance coverage. A significant portion of the population that receives coverage obtains it from their employers.
Plum, a young startup that makes it easier and more affordable for more businesses nationwide to provide insurance coverage to their employees, said on Monday it had raised $ 15.6 million in its Series A funding to accelerate its growth . Tiger Global led the funding round.
Existing investors Sequoia Capital India Surge, Tanglin Venture Partners, Incubate Fund, Gemba Capital, also participated in the new round, which brings the 1.5-year-to-date fundraiser to $ 20.6 million. TechCrunch reported earlier this year that Plum was in talks with Tiger Global for the new round of funding.
Kunal Shah (founder of Cred), Gaurav Munjal, Roman Saini and Hemesh Singh (founders of Unacademy), Lalit Keshre, Harsh Jain and Ishan Bansal (founders of Groww), Ramakant Sharma and Anuj Srivastava (founders of Livspace), and Douglas Feirstein (founder of Hired) also participated in the new round.
Plum offers health insurance coverage on a B2B2C model. The startup is partnering with small businesses to provide health insurance coverage to all of their employees (and their family members), charging as little as $ 1 per month for an employee.
The startup developed the insurance stack from scratch and partnered with insurers to include additional coverage on pre-existing and dental conditions, said Abhishek Poddar, co-founder and CEO of Plum, in an interview with TechCrunch .
(Like fintech companies, which partner with banks and NBFCs to provide credit to customers, online insurance startups have partnerships with insurers to provide health insurance coverage. Plum maintains partnerships with ICICI Lombard, Care Health, Star Health and New India Assurance.)
Poddar, who has worked at Google and McKinsey, said Plum is making it increasingly affordable and attractive for companies to choose the startup as a partner. Most insurance companies and online aggregators in India are currently serving consumers. There are very few actors who engage with businesses. Even among those that do, they tend to be more expensive and less flexible.
Plum offers the employees of its partner client the possibility of supplementing their health insurance coverage or extending it to other members of the family. Unlike its competitors which require that the entire premium be paid annually, Plum gives its customers the option of paying monthly. And registering an entire business for Plum takes less than an hour. (Speed is a key differentiator for Plum. Small businesses typically have to spend months negotiating with other insurers. Bangalore-based Razorpay has also partnered with Plum to offer the startup’s clients fintech a three-click, one-minute option to sign up for insurance coverage.)
The startup plans to deploy the new capital to further expand its offerings, making its platform open to small businesses with teams as small as seven employees to sign up, Poddar said. The startup plans to cover 10 million people in India with insurance by 2025, and potentially expand into international markets, he said.
India has an under-penetrated insurance market. In an underpenetrated landscape, digital distribution via web aggregators now accounts for just 1% of the industry, Bernstein analysts wrote in a recent report.
“As India’s health insurance industry grows and transforms rapidly, Plum is well positioned to make comprehensive health insurance accessible to millions of Indians. We are delighted to partner with Abhishek, Saurabh and the Plum team as they extend their cutting edge technology platform to employers nationwide, ”said Scott Shleifer, Partner at Tiger Global, in a statement.
Plum is Tiger Global’s latest investment in India this year. The hedge fund, which has backed more than 20 Indian unicorns, has become the most prolific investor in Indian startups in recent months, gaining founders with its investment pace, check size and favorable terms. Last week, the firm invested in the Indian social network Koo.