“Nasdaq was an ideal residence for a corporation like ours”
Motor & Fleet
Final week, B2B auto insurtech Roadzen secured a Nasdaq itemizing with a $683 million fairness worth, which the corporate’s CEO, Rohan Malhotra, stated is the subsequent step in its evolution.
“Nasdaq was an ideal residence for a corporation like ours,” he stated.
“The final three to 4 years have simply been about scaling, resulting in this itemizing, which is a part of our 4 core methods of progress and innovation.”
These 4 areas of alternative embody:
- Telematics-led security gadgets.
- Discovering options for usage-based, asset-based and driver score-based underwriting strategies.
- Increasing distribution channels as automobile producers gear as much as launch their very own insurance coverage and white-label merchandise.
- Deal with fixing 80% of claims in below two minutes.
In an interview with Insurance coverage Enterprise, Malhotra spoke about how being publicly traded will enable Roadzen to attain its objectives, the corporate’s M&A urge for food and the way it plans on avoiding the potential pitfalls of going public.
Taking over a brand new look
Insurance coverage Enterprise initially reported in February that Roadzen was present process the method to change into publicly listed, which was lastly accomplished final week.
For Malhotra, having that Nasdaq affiliation lends his firm an elevated stage of legitimacy within the eyes of potential companions inside the insurance coverage and auto business.
“At present we work with 90 enterprise prospects the world over. These embody insurers, corresponding to AXA, Allianz, California Casualty and others, alongside automobile producers like Mercedes, Audi and Volvo,” he stated.
Malhotra stated he hopes that when firms see that Roadzen has the governance of one of the crucial stringent capital markets on the earth, it can make them really feel extra snug collaborating with the corporate.
“We will work with them throughout a number of international locations, and we’ve seen a significant acceleration in our gross sales,” he stated.
Elsewhere, the corporate is trying to recruit extra expertise to construct out its capabilities and is actively on the hunt for professionals within the AI, mobility and insurance coverage industries.
Stepping up M&A exercise
One other space of growth Roadzen is trying to construct on with its Nasdaq itemizing is ramping up M&A exercise.
“The general public markets are an important foreign money for M&A,” Malhotra stated.
He acknowledged that there are two segments of companies Roadzen is keen on buying, the primary being firms which are entrenched in distribution. “There are millions of brokers and businesses on the market, which make up 40% of the $800 billion in auto insurance coverage gross sales,” Malhotra stated.
“We need to purchase a number of gamers on this house and really use our expertise to influence underwriting and assist make distribution extra seamless.”
Moreover, Roadzen is trying to purchase firms which are making technological inroads into linked automobiles, drivers’ security, automobile components knowledge and the like.
“Principally, knowledge AI expertise corporations that may create new insurance coverage experiences,” Malhotra stated.
Dodging post-IPO blues
Inventory efficiency for some insurtechs which have gone public in recent times has not at all times lived as much as investor expectations, however Malhotra stated he didn’t see this as being a problem for Roadzen.
“A lot of the gamers who went into the capital markets are direct-to-customer insurers and that may be a very tough business,” Malhotra famous.
There will be many hurdles for smaller firms that won’t have the promoting budgets to achieve customers on a big scale like the larger opponents.
“For those who’re promoting a commoditized product, what you’re left with is the power solely to accumulate prospects by paying extra for them,” he stated.
“A few of these firms will be spending $30 million 1 / 4 strictly on buyer acquisition and different related prices, and that doesn’t think about claims funds.”
Roadzen is a B2B firm that doesn’t promote a commoditized product, as an alternative it really works internally with different firms to assist increase its processes.
“You’ll select me due to the expertise, not as a result of I’m going to pay you extra for buyer acquisition, and that’s the mannequin that we selected to give attention to,” Malhotra stated.
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