Coverfox CTO and CEO resign amid uncertain future

Insurance aggregator Coverfox is a boat floating in hot waters. The firm’s Co-founder and Chief Technology Officer Devendra Rane had resigned from his position a month ago and now the company’s Chief Executive Officer Premanshu Singh has resigned due to uncertainty about the company’s future.

According to a report by Entrackr, the company’s executives had requested its existing investors to support the company further until it achieves profitability. But the investors have declined to further associate themselves with the failing company.

“The company has been struggling to raise funds and its current investors also refuse to put in more money,” said an anonymous person cited in the report. “This led to the top executives leaving and now the board has appointed a new CEO.” There is no update on the new CEO.

The report further mentioned that Coverfox has been up for sale — looking to consolidate with a larger player in the sector for four-five months but to no avail. “It had engaged with several companies including PolicyBazaar, Paytm and even Amazon but none of them showed interest in taking over the company,” said another person to Entrackr, requesting anonymity.

Paytm was reportedly in talks to absorb Coverfox but the talks didn’t go through. It was also said to be in conversations to raise $50 million in Series D round but existing investors aren’t keen on infusing more money, as per the second source cited above.

“Paytm had initially offered about $70-80 million to Coverfox but the company denied the offer as it believed it deserved a better deal,” said the above-quoted source. Six months later, it resumed talks with Paytm for the deal since the company talks with other potential acquirers that did not materialize. But, this time Paytm wasn’t even ready to pay the price it originally offered. “Paytm offered $25-30 million worth cash buy-out that the company’s board rejected,” he said.

Sources also say that the Noida-based firm has been building its own insurance vertical that is likely to be launched soon. It’s worth noting that SAIF Partners is a common investor in both firms. Coverfox was founded by Varun Dua and Rane in 2013. However, Dua moved away eventually to start Acko General Insurance in 2016. Founded in September 2017 as an insurance firm, Acko raised close to $150 million in total capital including a $36 million worth round in November last year.

Source: hrnxt

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