If transaction turns out to be successful, Paytm will be positioned as one of the largest competitors for insurance marketplace Policybazaar.

Indian e-commerce payment system and digital wallet company Paytm may reportedly acquire Coverfox, an online insurance startup, for around $100-120 million in an all-cash deal. The board of the company has been in the process of finalizing the deal, cited reliable sources.

Reportedly, if transaction turns out to be successful, Paytm will be positioned as one of the largest competitors for insurance marketplace Policybazaar. The parent company of the firm One97 Communications, Policybazaar and SoftBank Vision Fund, the common stakeholder in Paytm, may pose challenges to the deal.

Last year in April, Coverfox had apparently raised $22 million in a series C funding round led by Transamerica, IFC, a member of World Bank Group, and other existing investors. The company had earlier raised $17 million in Series A and B funding together, from Accel, SAIF partners, and Catamaran Ventures, a private equity investment arm of NR Narayana Murthy.

Allegedly, the speculation follows the betting of Ministry of Electronics and Information Technology (MeitY) on Paytm to lead the digital payments growth in India. Recently, the ministry asked the company to support its target of facilitating 40 billion transactions in FY20.

MeitY has given a target to Paytm of 5 billion transactions through its payments bank and mobile wallet. The recoding of 40 billion digital transactions will lead to a 33 percent hike from past year’s target of 30 billion digital payments.

According to the reliable sources, Paytm currently processes over 400 million transactions on its gateway business for its merchants.

With the acquisition of Coverfox, Paytm will look to garner more customers in the insurance space. Last year, it had incorporated two insurance companies, Paytm General Insurance Corporation Ltd. and Paytm Life Insurance Corporation Ltd. Both the companies have been classified as public companies, limited by shares, with an initial paid-up capital/authorized capital of $15,390 (INR 1 million).

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