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The Gurgaon based start-up offers buyers the opportunity to compare and choose insurance policies

The Indian middle class dream of securing ones financial future is proving to be a hot business opportunity for a growing number of digital entrepreneurs. Combining technology interface with plain vanilla marketing of financial services and products, young entrepreneurs are building fastgrowing businesses that link insurance companies and banks with retail consumers online. For instance, Policybazaar, a Gurgaon based start-up, offers buyers the opportunity to compare and pick up from an overflowing basket of insurance policies.

Established in the latter part of 2008, the e-commerce firm plans to double its revenues by the end of this fiscal from the current level of . 12.5 crore. "There is immense potential in insurance in India as current penetration is really low," said Yashish Dahiya, co-founder and CEO of the firm. Current estimates indicate that just four out of every 100 Indians hold a life insurance policy.

Dahiya set up Policybazaar with Avaneesh Nirjar and Alok Bansal - all three first generation entrepreneurs - to make insurance purchase easy in the country. Prior to setting up the company, they chased their dreams in the corporate world and worked in companies including First Europa, a global online insurance broker and ebookers Plc, a travel business. "When I set up ebookers Plc, a travel business which employed 2,000 people across 13 countries in Europe, it was almost an entrepreneurial project," said Dahiya.

The trigger to set up the insurance portal was the low penetration, which in turn throws up significant opportunities. Also, the profit margins in setting up an insurance portal are quite high as more people are now looking to buy risk cover at discounted rates. Typically discounts for customers are drawn from lower processing costs. Online automated loan and insurance processing is 70% cheaper than selling through a physical bank branch - these cost savings are shared with the customer Policybazaar which offers a comparison of various insurance policies based on price, quality and key benefits was incubated over two years ago with . 20 crore seed funding from Info Edge (India) Ltd, which runs recruitment portal Naukri.com.

Sanjeev Bikhchandani, Info Edge founder and managing director, said it is the large potential in the insurance market and the first mover advantage that made him invest in the company. "Innovation, a good team and an early mover advantage are some of the things that we look at before investing in a company," he added. As the online e-commerce financial services portals turn into multiproduct offerings, Policybazaar add on personal loans, credit cards and home loans. Besides, it also plans to offer comparisons of prices on utility services such as satellite televisions. Earlier this year, in May, the company received its second round of funding from Info Edge and Intel Capital, the corporate venture capital arm of chipmaker Intel. Intel invested . 30 crore and Info Edge, . 10 crore. Together they now control 60% stake in the firm.

"This funding will help Policybazaar build brand awareness and enhance its technology platform," Arvind Sodhani, president at Intel Capital earlier told ET on the sidelines of the announcement of capital infusion in the firm. With about five million registered users, Policybazaar currently has a headcount of 400 employees spread across offices in Gurgaon, Delhi and Mumbai. "By the end of 2015 we hope to float an initial public offering to give our investors an exit route ," said Dahiya.

Policybazaar

Founders: Yashish Dahiya, Alok Bansal, Avaneesh Nirjar

Area of business: Finance, insurance

Revenue for FY 2010-11: . 12.5 crore

Target revenue for FY 2011-12: . 25 crore

Investors: Intel Capital, Info Edg

Specialised service: Caters to consumers with comparison of insurance products