Singapore-based InsurTech startup Igloo secures funding to expand its reach in Southeast Asia’s insurance market by acquiring licences and innovating distribution models.

Singapore-based insurance technology (InsurTech) startup Igloo successfully secured US$36 million in pre-Series C funding. Eurazeo‘s InsurTech fund led the investment, supported by Openspace‘s OSV+ and Paris-based investor La Maison.

The substantial funding injection aims to fuel Igloo’s strategic expansion across Southeast Asia’s insurance tech sector. Raunak Mehta, CEO and co-founder of Igloo, highlighted the company’s intention to pursue merger and acquisition opportunities, both horizontally for new licences and vertically for innovative distribution models or technologies that enhance Igloo’s existing tech infrastructure.

Operating on a business-to-business-to-consumer model, Igloo acts as an intermediary for insurance products, partnering with major insurers such as Etiqa, Sompo Insurance, and Chubb. Its clientele includes prominent enterprises like Lazada and Shopee, offering a diverse array of insurance solutions, from e-commerce protection to health insurance tailored for gamers and weather index coverage for farmers.

The strategic acquisition of licences aligns with Igloo’s goal of assuming more regulatory risk from insurers, aiming to reduce costs and reinforce profit margins. Despite doubling year-on-year gross written premiums and facilitating over 200 million policies annually, a considerable portion of the premiums, 45%, gets lost in fees paid to insurers.

The Co-founder and CEO of Igloo, Raunak Mehta, expressed a strong desire to enhance the startup’s net-to-gross ratio: “Our business is growing at over 100% CAGR each year, with gross margins escalating even faster. We’re improving our ability to extract margins from the market, especially with our more innovative products.”

Singapore Igloo

Albert Shyy, Eurazeo’s Managing Director, highlighted Igloo’s evolution into a diverse insurance platform, foreseeing its potential to significantly enhance insurance accessibility and comprehension for consumers in Southeast Asia.

Although the 2022 financial report showcased a 44% revenue increase to US$5.13 million, Mehta clarified that this figure excludes substantial distribution costs due to auditor classifications, emphasising that it shouldn’t be considered as net revenue. Igloo aims to achieve EBITDA breakeven by the end of 2024.

Looking ahead, Igloo plans to expand its regional team by adding 100 individuals to its current 250-strong workforce in 2024. Emphasising the untapped potential in the insurance market, Mehta highlighted the continued growth opportunities for Igloo, present particularly in Southeast Asia, where insurance penetration remains low despite high internet and smartphone usage.

The competitive landscape includes both traditional incumbents and smaller, venture-backed insurers like Indonesia’s Qoala and Fuse, indicating a dynamic market.

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