Amazon helped raise $12 million for Acko
Amazon (AMZN) recently led a funding round that raised $12.0 million in additional capital for India-based digital insurance startup Acko. Amazon was joined by investors such as ChrysCapital and Catamaran Ventures in the latest round for Acko, according to TechCrunch.
Acko creates insurance products for the Internet economy, with specific insurance products aimed at the e-commerce, ride-hailing, and online travel sectors. The startup is trying to disrupt India’s $12.0 billion insurance industry.
Amazon is showing more interest in the insurance business
The investment in Acko seems to be another indicator of Amazon’s growing interest in the insurance business—and the financial service sector in general. Early this year, the company announced that it was joining forces with J.P. Morgan (JPM) and Berkshire Hathaway (BRK.A)(BRK.B) on new health insurance programs for their employees.
Amazon has also recently been linked to plans to expand in the financial services sector with a checking account product aimed specifically at the unbanked and young people.
Nurturing customer loyalty
If Amazon is eyeing expansion in the financial services sector, it may leverage its relationship with Acko to expand its offerings and strengthen its position. For example, the company could pitch an insurance product to merchants who become its loan customers to grow their businesses.
A financial package bundled with insurance could go a long way toward improving Amazon’s customer loyalty, particularly among third-party traders on its marketplace. With consumers increasingly starting their online shopping journeys at marketplaces rather than on search engines, Amazon is under pressure to guard against loss of marketplace market share to rivals like eBay (EBAY) and Walmart (WMT).