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Paytm is in Discussions to Buy Mumbai-based Firm, Coverfox for $100-120 million

The Indian digital company, Paytm is in discussion to buy the insurance firm, Coverfox for $100-$120 million; the transaction will be entirely in cash.
BY BEx Bureau
BusinessEx
Jun 03, 2019

The Indian digital company, Paytm is in discussion to buy the insurance firm, Coverfox for $100-$120 million. The business deal will be entirely in cash, two people aware of the matter told the Indian daily newspaper, The Economic Times.

If the transaction takes place then it will be the biggest acquisition of the digital company, Paytm. Furthermore, the digital payment company will emerge in the Indian insurance market as the major competitor to Policy Bazaar.

Softbank, which is a major investor in Paytm, holds stakes in Coverfox too. Owing to which, problems can emerge in the deal, according to the people cited above.

The Paytm board is in the process of finalising the contours of the deal, said one of the individuals.

The situation is still dicey as company directors are assessing the advantages and disadvantages of the deal, said a person cited above.

There is still a chance that it may fall through as the board deliberates on the pros and cons of the transaction, the person told the above-mentioned newspaper.

In total, Coverfox has raised $40 million and renowned investors namely, SAIF Partners, Accel Partners, International Finance Corporation and Catamaran Ventures have invested in it. If the transaction takes place then these existing investors will have to leave their shares in Coverfox.



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