Plum Raises $15.6M to Revolutionize Indian Health Insurance

Health Insurance Access in India: Plum Secures $15.6 Million Series A Funding

A large percentage of the population in India, the world’s second most populous country, currently lacks health insurance. A considerable number of those who *do* have coverage receive it through their employers.

Plum's Series A Funding

Plum, a relatively new company focused on simplifying and reducing the cost of employee insurance for businesses across India, announced on Monday a successful $15.6 million Series A funding round to fuel its expansion.

Investment Details

This funding round was spearheaded by Tiger Global, with significant participation from existing investors including Sequoia Capital India’s Surge, Tanglin Venture Partners, Incubate Fund, and Gemba Capital. Earlier reports from TechCrunch indicated ongoing discussions between Plum and Tiger Global regarding this financing.

Notable individual investors also contributed to the round. These include Kunal Shah (Cred’s founder), Gaurav Munjal, Roman Saini, and Hemesh Singh (Unacademy’s founders), as well as Lalit Keshre, Harsh Jain, and Ishan Bansal (Groww’s founders). Ramakant Sharma and Anuj Srivastava (Livspace’s founders) and Douglas Feirstein (Hired’s founder) also participated.

This latest investment brings the total funding raised by the one-and-a-half-year-old startup to $20.6 million.

Plum’s Business Model

Plum operates on a B2B2C (business-to-business-to-consumer) model, collaborating with small and medium-sized enterprises to offer health insurance benefits to their employees and family members. Coverage can be obtained for as little as $1 per employee per month.

Technology and Partnerships

According to Abhishek Poddar, co-founder and CEO of Plum, the company has built its insurance technology platform from the ground up. They have also established partnerships with insurance providers to broaden coverage, including pre-existing conditions and dental care.

Similar to fintech companies that collaborate with banks and NBFCs to facilitate lending, Plum partners with insurers to deliver health insurance solutions. Current partnerships include ICICI Lombard, Care Health, Star Health, and New India Assurance.

Competitive Advantage

Poddar, formerly with Google and McKinsey, emphasizes Plum’s commitment to making insurance more accessible and appealing to businesses. Currently, most insurance companies and online aggregators in India primarily focus on individual consumers.

Few companies specifically target businesses, and those that do often present higher costs and less flexibility. Plum distinguishes itself by offering a streamlined and cost-effective solution.

Additional Benefits and Speed of Implementation

Plum allows employees of partner companies to supplement their existing health insurance or extend coverage to family members. Unlike traditional models requiring annual premium payments, Plum offers monthly payment options.

The process of enrolling an entire company with Plum is remarkably efficient, typically taking less than an hour. This speed is a significant advantage, as small businesses often face months of negotiations with other insurers.

Razorpay, a Bangalore-based fintech company, has integrated with Plum to provide its clients with a simplified, three-click, one-minute insurance signup process.

Future Plans

The newly acquired capital will be used to expand Plum’s offerings and extend its platform to even smaller businesses, including those with teams as small as seven employees.

Plum aims to provide insurance coverage to 10 million people in India by 2025 and has plans for future international expansion, according to Poddar.

Market Opportunity

Analysts at Bernstein highlight the underpenetrated nature of the Indian insurance market. Digital distribution through web aggregators currently represents only 1% of the industry.

Tiger Global’s Perspective

Scott Shleifer, partner at Tiger Global, stated, “Plum is uniquely positioned to broaden access to comprehensive health insurance for millions of Indians as the healthcare insurance sector in India rapidly evolves. We are pleased to collaborate with Abhishek, Saurabh, and the Plum team as they scale their leading, technology-driven platform to employers nationwide.”

Tiger Global’s Investment Activity in India

Plum represents the latest investment by Tiger Global in the Indian market this year. The hedge fund, having already invested in over 20 Indian unicorns, has become a highly active investor in Indian startups, attracting founders with its rapid investment pace, substantial check sizes, and favorable terms. Last week, the firm invested in the Indian social network, Koo.