After Jio, Google plans to invest in Policybazaar

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After Jio, tech giant Google is now looking to buy a minority stake in SoftBank-backed online insurance platform Policybazaar. As per the media report, this investment is also a part of Google’s goal to invest $10 billion in India over the next five to seven years. A recent Economic Times report cited sources saying that Google looking to acquire about 10% of Policybazaar and could invest about $150 million. The sources also told the publication that  SoftBank, which holds a 15% stake in Policybazaar, may make a partial exit

The financial daily report quoted a source saying, “Google is looking at the deal as it wants to increase its presence in the Indian digital market. The valuation and the stake will depend on the last investment rounds”.

It is worth noting that Reliance Industries Chairman and MD Mukesh Ambani, during the 43rd Annual General Meeting (AGM) of the company, confirmed that Google will invest Rs 33,733 crore for 7.7% stake in Jio Platforms. Google’s investment will translate into a 7.73% equity stake in Jio Platforms on a fully diluted basis.

Last month, Alphabet and Google CEO Sundar Pichai announced a $10 billion (around Rs 75,000 crore) fund to accelerate India’s digital economy. The US-based tech behemoth is all set to expand its presence in the main overseas market. “Today, I’m excited to announce the Google for India Digitization Fund. Through this effort, we will invest Rs 75,000 crore, or approximately $10 billion, into India over the next 5-7 years. We’ll do this through a mix of equity investments, partnerships, and operational, infrastructure and ecosystem investments. This is a reflection of our confidence in the future of India and its digital economy,” Pichai said.

The report quoted Pichai saying, “looking forward to working with Indian businesses of all sizes”.  Google is also looking for four-five more deals in the Indian technology startup space.

Policybazaar IPO: 

It is worth mentioning that Policybazaar is reportedly planning to raise funds through an initial public offer (IPO) next year. Policybazaar cofounder Yashish Dahiya told Bloomberg News earlier this year in July that the company is looking to secure about $250 million in funding before that and that it is also aiming to raise the funds at “a valuation north of $3.5 billion”, before a September 2021 IPO.

In July this year, SoftBank Vision Fund picked up an additional stake for $130 million in EtechAces Marketing and Consulting, holding company of online financial services portals PolicyBazaar and PaisaBazaar. The new investment gave it an over 15% stake in the company and value it at about $1.5 billion. As per media reports, the investment was a mix of primary infusion of capital into the company at about $50 million and purchase of shares worth another $80 million.