Insurtech Startup Igloo Raises Pre-Series C Funding of IDR 555 Billion from Eurazeo and BNP Paribas Cardif

Startups insurtech Igloo announced the acquisition of pre-series C funding worth $36 million (more than IDR 555 billion) led by global investment company Eurazeo and insurance company BNP Paribas Cardif. Previous investors in Series B such as Openspace Ventures and La Maison also participated in this round.

This investment from Eurazeo focuses on the development of innovative technology and business ideas that disrupt the insurance industry. Meanwhile, investment from Openspace is made through OSV+ funds, namely a managed fund specifically for mid-stage funding that focuses on series C and D rounds of startups in Southeast Asia.

This additional funding allows the company to open up merger and acquisition opportunities at horizontal and vertical levels, after adding licenses as a broker throughout the Southeast Asia region, including Indonesia (in collaboration with PT Solusiutama Tekno Broker Asuransi).

The company will increase the number of talents by 20% in the fields of technology, commercial, strategy and insurance products. Insurance products and the value chain have also been expanded, by expanding to motor vehicle, health, climate-related insurance products, digitization of underwriting and claims, as well as AI and blockchain technology.

"We have monitored Igloo's performance and have been impressed with their evolution into a multi-insurance platform across multiple distribution channels and products. We believe Igloo is in a strong position to help address the low insurance market penetration in Southeast Asia by making insurance more accessible and understandable to consumers," said Albert Shyy, Managing Director of Eurazeo in an official statement, Monday (4/12).

The funding closed 10 months after announcing a series B+ led by InsuResilience Investment Fund II managed by BlueOrchard last year. Overall, Igloo has successfully raised $100 million in investment funding.

It is claimed that in this series C round, Igloo was able to increase the company's valuation by 50%. The factor is influenced by the ability to double the value Gross Written Premium (GWP) with levels burn rate low, and the company's business model focuses on engineering and data. This achievement makes Igloo one step closer to profitability in 2024.

Insurance market share

Igloo Co-founder & CEO Raunak Mehta said that the support from investors is proof of Igloo's stable growth and resilience amidst industry challenges. This funding round is the result of validation of the company's strategy and business performance.

“Igloo is a one-of-a-kind company insurtech in Southeast Asia which has a promising profit and loss report, a diverse multi-product portfolio, and clear distribution channels," explained Mehta.

Igloo Indonesia Country Manager Henry Mixson added, support from investors will help expand Igloo's ability to provide insurance services throughout Indonesia, and then provide more protection to our customers. This will be done through increased partnerships with industry players, expansion of B2C offerings through the site, and growth in new verticals.

“That way, we can serve more B2B and B2C customers. We understand that the upcoming election will impact business and individual spending decisions. However, we are very excited about the opportunities in Indonesia. "Therefore, we will take advantage of these opportunities to provide and offer more accessible and affordable insurance to increase insurance literacy and penetration in Indonesia," he said.

The Asian insurance market has tremendous potential, especially in developing countries such as Indonesia, Vietnam and the Philippines. Even though insurance adoption continues to increase, there are still many people who have not been touched by insurance services.

According to the Indonesian Insurance Roadmap 2023-2027 by the Financial Services Authority (OJK), the insurance penetration rate in Indonesia which was in the range of 3,5% in 2021 has decreased to 2,7% in 2022. Although, this can happen for various reasons, one of them is due to an increase in GDP, which correlates with Indonesia's growth target to become the country with the 4th largest economy by 2045.

Igloo targets to take advantage of this opportunity, by strengthening its digitalization system as one of its main strategies, especially in the next five years. In addition, the company will continue to develop partnerships and agency business models in order to improve existing processes throughout the insurance value chain.

In 2022, the company launched Ignite by Igloo, a digital platform that increases productivity insurance sales partner. Ignite has collaborated with 22.000 partners in Indonesia and Vietnam, and has a target to reach 50.000 partners by the end of 2023, as it plans to expand to other countries.

Ignite is in line with Igloo's vision to increase financial inclusion for underserved segments of society, more than 60 percent of Ignite partners are women.

Another innovation from Igloo is Weather Index Insurance, a parametric insurance based on blockchain technology that can help farmer groups. This product has succeeded in attracting the interest of various partners in Vietnam because of its potential and benefits for the agricultural sector. Although the product is new in a very traditional sector, Weather Index Insurance has been adopted by thousands of Vietnamese farmers since its launch in November last year, and protects at least 20.000 hectares of coffee and rice farming land.

It is said that Igloo has facilitated more than 500 million policies and targets to double its Gross Written Premium (GWP) since 2022. Now, the company has established more than 75 partnerships in six countries, expanding its product offerings to include consumer financing, e-commerce, and logistics.