Last week, B2B auto insurtech Roadzen secured a Nasdaq listing with a $683 million equity value, which the company’s CEO, Rohan Malhotra, said is the next step in its evolution.
“Nasdaq was a perfect home for a company like ours,” he said.
“The last three to four years have just been about scaling, leading to this listing, which is part of our four core ways of growth and innovation.”
These four areas of opportunity include:
In an interview with Insurance Business, Malhotra spoke about how being publicly traded will allow Roadzen to achieve its goals, the company’s M&A appetite and how it plans on avoiding the potential pitfalls of going public.
Insurance Business initially reported in February that Roadzen was undergoing the process to become publicly listed, which was finally completed last week.
For Malhotra, having that Nasdaq affiliation lends his company an increased level of legitimacy in the eyes of potential partners within the insurance and auto industry.
Malhotra said he hopes that when companies see that Roadzen has the governance of one of the most stringent capital markets in the world, it will make them feel more comfortable collaborating with the company.
“We can work with them across multiple countries, and we’ve seen a meaningful acceleration in our sales,” he said.
Elsewhere, the company is looking to recruit more talent to build out its capabilities and is actively on the hunt for professionals in the AI, mobility and insurance industries.
Another area of expansion Roadzen is looking to build on with its Nasdaq listing is ramping up M&A activity.
“The public markets are a great currency for M&A,” Malhotra said.
He stated that there are two segments of businesses Roadzen is interested in acquiring, the first being companies that are entrenched in distribution. “There are thousands of brokers and agencies out there, which make up 40% of the $800 billion in auto insurance sales,” Malhotra said.
“We want to acquire multiple players in this space and actually use our technology to impact underwriting and help make distribution more seamless.”
Furthermore, Roadzen is looking to acquire companies that are making technological inroads into connected cars, drivers’ safety, car parts data and the like.
“Basically, data AI technology firms that can create new insurance experiences,” Malhotra said.
Stock performance for some insurtechs that have gone public in recent years has not always lived up to investor expectations, but Malhotra said he did not see this as being an issue for Roadzen.
“Most of the players who went into the capital markets are direct-to-customer insurers and that is a very difficult industry,” Malhotra noted.
There can be many hurdles for smaller companies that may not have the advertising budgets to reach consumers on a large scale like the bigger competitors.
“If you’re selling a commoditized product, what you’re left with is the ability only to acquire customers by paying more for them,” he said.
“Some of these companies can be spending $30 million a quarter strictly on customer acquisition and other associated costs, and that doesn’t factor in claims payments.”
Roadzen is a B2B company that does not sell a commoditized product, instead it works internally with other companies to help augment its processes.
“You will choose me because of the technology, not because I’m going to pay you more for customer acquisition, and that’s the model that we chose to focus on,” Malhotra said.