Venture capital fund Sequoia Capital has invested in health insurer Star Health and Allied Insurance Co. Ltd, according to Sumir Chadha, managing director of the venture capital firm.
“We are very excited about our investment in Star Health, India's leading health insurance company,” Chadha said. “The company has built a very strong market position in both the retail and government health insurance verticals.”
Sequoia had picked up a 25% stake for $35 million ('157.85 crore), a person close to the deal said on condition of anonymity. Chadha refused to comment on the stake, but said his firm's investment was similar to ICICI Venture.
ICICI Venture's investment was for a stake of 18-19%, said another person associated with the deal, who also did not want to be identified.
Chennai-based Star Health and Allied Insurance, a joint venture formed by Oman Insurance Co., a unit of the ETA Group, was established in 2006. It is India's first pure play health insurer. The firm had a capital base of '303 crore at the end of March, according to information available on its website.
The Economic Times in March reported that four funds led by ICICI Venture, the growth fund of Carlyle and Sequoia Capital had invested about $100 million for a 40% stake in the company.
India's health insurance market is expected to post a compound annual growth rate of more than 25% between fiscal 2010 and fiscal 2014, according to a report by research firm RNCOS.
Health insurance premium collections touched $1.45 billion in 2008-09, compared with $1.13 billion in the previous year, India's Insurance Regulatory and Development Authority said in its annual report for 2008-09, the latest available.
Source: i stock analyst