BankBazaar Initiates Talks with Investors to Raise Capital

Chennai-based Indian online financial product marketplace, BankBazaar has begun conversations with investors for raising funds, various individuals with knowledge on the subject said. The firm considers Sequoia Capital (venture capital fund) and Amazon among its prominent stakeholders.

“BankBazaar has recently mandated investment bank UBS to raise between $80 million to $100 million.,” said one of the individuals.

“Key performance ratios have more than doubled since the last fund raising round in 2017 and in this round, the valuation of the company should comfortably be upwards of $500 million.” the person said.

In October 2017, Experian, a UK-based credit rating agency and information management company, acquired a 10% stake in BankBazaar for nearly $30 million, assessing the marketplace at around $300 million.

“The funds will be used for acquiring customers, marketing and for expanding paperless products. There will be new investors (strategic, quasi-strategic or financial) participating in this round as well as some existing investors.”, said another source.

Amazon and Sequoia are the major shareholders in the company, with others being Mousse Partners, Fidelity Growth Partners and Walden International.

“Online financial products marketplaces are extremely relevant in a heterogeneous market like India. It helps market the products to select slivers of consumer segments more efficiently and also promotes creation of more utility products that benefit the end users as against only those products that could offer higher distribution margins to cater to physical channels.”, says Karan Sharma, Executive Director & Co-head (Digital & Technology Investment Banking), Avendus Capital.