Digit

[nwoodman]

Some links regarding Digit (formerly Oben),  Fairfax's (45% holding)  insurance start up in India

http://godigit.com/
https://www.linkedin.com/company-beta/18073064/


(June 2017) "The company, which has already received preliminary approvals from the Insurance Regulatory and Development Authority of India (IRDAI), will start with a paid-up capital of Rs 385 crore ($US60m). Fairfax Holdings will control 45% of the firm while the balance will be held by Indian investors led by Goyal, who will be chairman of the bank.....

....Speaking to Times of India (TOI), Komaravelly said that the plan is to launch within the next 6-12 weeks, subject to final approvals from IRDAI. "We want to bring about a change in insurance. The differentiation is from the point of view of making the entire experience for the customer seamless," he said. "We are based out of Bengaluru because it has the right culture for startups and also we will be using technology extensively."

http://timesofindia.indiatimes.com/business/india-business/fairfax-to-back-general-insurance-startup-digit/articleshow/59124968.cms?TOI_browsernotification=true


(March 2017) IRDAI wants reduction of stakes by Fairfax in ICICI Lombard before the regulator considers the second level of approvals — known as R2 — for the new joint venture Oben Insurance. The second stage approvals for Oben Insurance, according to sources, is at least three months away when IRDAI board will meet.

http://indianexpress.com/article/business/companies/fairfax-gets-preliminary-irdai-nod-for-2nd-insurance-venture-4561044/


"A Fairfax backed company, started by Kamesh Goyal, Digit is here ‘To Make Insurance Simple’. With that as our mission, we are reimagining products and redesigning processes. We are going back to the basics and building simple and transparent insurance solutions, that matter to people. We call our employees, ‘Simplifiers’ because that is their ultimate goal here. Our Chief Simplifiers are from insurance, tech and e-commerce, helping us shape this digital-first company. "

https://www.linkedin.com/company-beta/18073064/


"After 30 years in the industry, living and breathing insurance, I feel time is ripe to change the status quo. The Insurance industry has seen lots of changes in the last fifteen years in India. Most of the changes are related to making companies more efficient and processes better. However, unlike other sectors we have not seen Insurance companies redefining the customer experience."

http://godigit.com/why-i-started-digit/

An article on another Indian  insurtech company, Acko,  that is also pursuing an R2 license

https://techcrunch.com/2017/05/24/acko-is-an-ambitious-digital-play-to-disrupt-indias-10b-insurance-industry/

cheers

nwoodman

[nwoodman]

ICICI Lombard OK withinvestor backing rival co

Mumbai: ICICI Lombard is beefing up its digital platform to consolidate its position as the country's largest private non-life insurer even as partner Fairfax Financial Holdings prepares to pick up 49% stake in a rival non-life startup Digit. However, the private insurer does not see any conflict in Fairfax being the biggest shareholder by retaining close to 10% stake in ICICI Lombard.

Speaking to TOI, ICICI Lombard MD & CEO Bhargav Dasgupta said that the settlement with Fairfax has been amicable. "They are extremely bullish on general insurance — their core business — and they are very bullish on India. Fairfax was very keen to hold 49% in their India business," Dasgupta said.
However, this was not possible as ICICI Bank's stated objective was to list its insurance subsidiaries. "Since they had to obviously dilute because of the IPO, it made sense for them to invest in a business where they could hold 49%," he added.

ICICI Lombard has been the first general insurer to file for an IPO through which Fairfax and ICICI Bank are diluting their shareholding by 12% and 7% respectively. "The company has 8.5% share of the Rs 1.28-lakh-crore non-life industry and has been growing at a compounded annual rate of 26.7% from FY15 to FY17" said Dasgupta. The non-life venture is valued by analysts at around Rs 30,000 crore. Going by current valuations the IPO is likely to raise Rs 5,700 crore.


http://timesofindia.indiatimes.com/business/india-business/icici-lombard-ok-withinvestor-backing-rival-co/articleshow/60266918.cms

[nwoodman]

Final approvals received for the new insurance venture in India

"A day after the Rs 5,600 crore initial public offer (IPO) of ICICI Lombard General Insurance sailed through successfully, the Insurance Regulatory and Development Authority of India (IRDAI) has granted the final approval to the new general insurance company Go Digit General Insurance floated by India-born Prem Watsa, who controls Fairfax, the parent firm of Lombard."

http://indianexpress.com/article/business/prem-watsa-gets-irdai-nod-for-new-insurance-venture-4853484/

[valueinvesting101]

Faering, A91 lead funding round in insurance distributor Go Digit

The equity funding round, which was also led by TVS Capital, values the three-year-old firm at $800 mn.

Digit is also backed by Canadian billionaire Prem Watsa’s Fairfax Holdings, which has invested $140 million across rounds.

https://www.livemint.com/companies/start-ups/faering-a91-lead-funding-round-in-insurance-distributor-go-digit-11579545903956.html

[nwoodman]

https://bfsi.eletsonline.com/digit-is-aiming-to-expand-with-simple-and-relevant-products-vijay-kumar-ceo-principal-officer-digit-insurance/

Digit Insurance was founded by Kamesh Goyal, an insurance veteran with over 30 years of experience in the industry. Digit’s core idea was to simplify the insurance customers’ journey and provide them with a seamless experience. Right from products to processes and documents, we are trying to simplify their journeys. We are glad that with this mission within three years of operations:

• we have crossed a base of 14 million customers
• with a premium of $674 million and
• closed more than 260k claims.

We have gained 1.34% overall Market Share, as on 30th September 2020, all this in less than 3 years of operation and also, we’ve achieved breakeven as of June 2020.

Pretty amazing what Kamesh Goyal  and team are doing here.  It does make you wonder what multiple the Robinhood crowd would place on them.  Lemonade (LMND) has in force premiums of around $200mm and is losing money.  Market Cap $6.9B.

Cheers
Nwoodman

[nwoodman]

https://www.moneycontrol.com/news/business/digit-insurance-becomes-first-unicorn-of-2021-with-1-9-billion-valuation-6350981.html

Fairfax-backed digital insurance company Digit Insurance disclosed on January 15 that it has achieved the valuation of $1.9 billion, becoming the first start-up to enter the unicorn club in 2021.

The company said it's valuation has doubled since last year.

The insurer said it achieved the $1 billion plus valuation (Rs 14,050 crore to be exact) in three years of operations after existing investors pumped in Rs 135 crore of additional capital in January 2021.

In January 2020, Digit had raised raise $84 million (approximately Rs 600 crore) from three growth equity investors - A91 Partners, Faering Capital and TVS Capital. Digit is backed by Prem Watsa’s Fairfax.

The terms are a bit mysterious.  Looks like the same players so not sure this provides any real price discovery.

Edit: Around 11 minutes in.  Money was raised via the 10% PE investors they brought in last year, marks all round   Very interesting to learn though that Kamesh pitched the idea to Ajit Jain and Buffett in 2011.  Apparently still catching up with Ajit to this day

https://www.timesnownews.com/videos/et-now/shows/digit-insurance-becomes-the-first-unicorn-of-2021-startup-central/86678

Cheers
nwoodman

[drzola]

I sat with the Ceo of Bangalore airport in Jan 2018 when a young employer had to present a shatty presentation because the CEO could not make it and I was very impressed and others in our group were not HAHA

[Dazel]

So how much is Digit going to trade for if it does an IPO on the Nasdaq? I think you have to consider this option
In this environment which comes along once every 20 or 30 years...why not cash in...would be huge $$$$ for Fairfax at the holding company level...support for the hard market and buybacks...what an opportunity.

Dazel

[TwoCitiesCapital]

So how much is Digit going to trade for if it does an IPO on the Nasdaq? I think you have to consider this option
In this environment which comes along once every 20 or 30 years...why not cash in...would be huge $$$$ for Fairfax at the holding company level...support for the hard market and buybacks...what an opportunity.

Dazel

Would love to see them list 49% if they could get the same types of prices described as above. Not to cash out or support Fairfax business TBH, but to rapidly grow and take market share in the Indian markets.

[Viking]

Nwoodman, thanks for posting. Can someone explain what a new $1.9 billion total co valuation for Digit Insurance means for Fairfax? Does Fairfax still own 49%? Will this new, much higher valuation for Digit flow though to BV for Fairfax when Q1 report comes out?

Fairfax certainly has a lot of significant tailwinds. The news just keeps getting better :-)

Here is a review of Fairfax’s ownership in Digit from 2019 AR.

Page 68: On December 23, 2019 Go Digit Infoworks Services Private Limited (‘‘Digit’’) entered into definitive agreements whereby its general insurance subsidiary Go Digit Insurance Limited (‘‘Digit Insurance’’) subsequently issued approximately $91 (6.5 billion Indian rupees) of new equity shares primarily to three Indian investors. This transaction valued Digit Insurance at approximately $858 (61.2 billion Indian rupees) and resulted in the company recording net unrealized gains on investments of $350.9 on its investment in Digit compulsory convertible preferred shares. The company also holds a 49.0% equity interest in Digit as described in note 6.

Page 72: On December 23, 2019 Digit entered into definitive agreements whereby its general insurance subsidiary Digit Insurance subsequently issued approximately $91 (6.5 billion Indian rupees) of new equity shares primarily to three Indian investors. This transaction valued Digit Insurance at approximately $858 (61.2 billion Indian rupees) and valued the company’s 49.0% equity interest in Digit at $122.3 at December 31, 2019. The company’s 49.0% equity interest in Digit is comprised of a 45.3% interest in Digit common shares and a 3.7% interest through Digit compulsory convertible preferred shares that are considered in-substance equity. Foreign direct ownership in the insurance sector in India is limited to 49.0% and as a result the remainder of the company’s investment in Digit compulsory convertible preferred shares are recorded at FVTPL as described in note 5.