The US retail giant reiterated its support to the Indian company after a first investment earlier this year. This new investment round led by Amazon, Ashish Dhawan, founder of ChrysCapital and Catamaran Ventures has enabled Acko to raise up to 42 million dollars.
After totaling up to 30 million in investments last year, Acko is moving beyond the boundaries of the traditional auto insurance sector for a more up-to-date formula. Founded in 2016, the startup now offers exclusively digital services, designed to take advantage of the growth of Internet access and allow it to expand it’s available coverage while enhancing the quality of products offered by an industry currently valued at more than 10$ billion.
According to founder Varun Dua, it is their new penchant for “web economy” that attracted interest from Amazon. Dua is considering a possible collaboration with the company: “We are a modern insurance company and [Amazon] believes we can create value. They see that a consolidation of financial services […] could happen given the data and number of users they sit on”, he says.
Amazon’s investment in India raises questions
India is becoming an emerging market for investors as there is a rapid rise of a new middle class in the country. The latter could become more important than that of China, once it is “banked”. Private banks offer mortgages, small business loans and check accounts to a population that isn’t fully familiar with these concepts yet.
The election of Prime Minister Narendra Modi in 2014 is one of the factors that explains this capital explosion. Strongly criticized since he sits, the man has nevertheless promised to boost spending on infrastructure, access to employment and curb inflation in his country. His reforms have allowed foreign investors to supply money to essential infrastructure such as energy or water. Also, the banking industry is now open to foreign direct investment. However, new regulations prevent price manipulation of many foods to remain affordable for the population.
With a young and rising workforce, more middle-class citizens and a strong economy, India is giving itself the means to become a heavyweight in the global economy. Although Amazon has only endorsed half a dozen companies, the American company seems to have an interest in creating strong financial ties in a region in full swing.
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