We will not sacrifice on experimentation for short-term profitability: PolicyBazaar founders

By the closing bell, shares were up almost 23% over the issue price, giving the fintech company a three-fold jump in valuation to over $7 billion, when compared to its last round in the private markets.  

In a candid chat with Mint, PB Fintech’s chairman and chief executive, Yashish Dahiya and chief financial officer Alok Bansal spoke about what it feels to be publicly listed, strategies on how they plan to run the business and the way forward. 

Edited excerpts:  

How does it now feel to be co-founders of a public company? Has the feeling sunk in yet? 

Dahiya: It has not fully sunken in, it will take some time. It has been overwhelming, and now we have a responsibility towards 4 lakh shareholders. We have been increasingly clear in setting expectations to shareholders that just because PB Fintech is publicly listed, it does not mean that we will be chasing short term profitability. 

Bansal: If you ask me honestly, the outer world is more excited but as founders nothing has changed. We continue to be solving for our customers, and that endeavour will not change. Shareholders have put money not because of our past data but rather because they believe in us long term. 

We will continue to experiment and be more communicative and honest. From a business perspective, nothing has changed.  

Both of you rang the bell at NSE today with your family members. What has been the response from them? 

Dahiya: My father was quite spaced out and I’m sure there was some recognition from his end. He actually asked me — What is an IPO? So he didn’t know.  My mother has been an investor in PolicyBazaar for the last 6-7 years, because I was there building it.  She has earned well from the IPO and I’m very happy for her. 

Without putting any pressure, I would also be proud if I could attend the IPO of a company my children built.  

Bansal: Yes, my spouse and kids were there and they were quite excited. I’m not sure if they truly understand what it means to go public. However, there is definitely a sense of achievement, especially when they have gone through the same struggles with us in the background. Families of founders never get enough recognition.  

What has been the response of your employees on this milestone? 

Dahiya: Our employees are quite excited. We have always been giving them liquidity (through ESOPs). The milestone of going public will mean more liquidity. The income generated from this event will be life changing for them.  

There is also recognition amongst our employees that what they have been working on until now, is being recognised by the larger world. And there is a genuine sense of excitement and pride, amongst the folks at work. 

During your IPO roadshows and investor meetings, are there any interesting insights we can see PB Fintech incorporating? 

Dahiya: Yes, quite a few which we may look to incorporate in the future. We can’t speak much about future plans. But we also received a lot of advice on how to manage the industry. 

There were a few things about how to create more profitability for our partners, which we will work on.  

With being a public entity now, do you feel the pressure to justify the valuation or lookat profitability?

Dahiya: We spent a total of $150 million to scale both PolicyBazaar and PaisaBazaar, including Docprime. That is not a bad outcome for building a direct-to-consumer business, especially looking at the current environment.  Our investors should know that we are not a ‘wasteful’ company.  

We will continue to drive profitability in our core business. But we will not sacrifice on experimentation for short-term profitability. That will be more value eroding rather than being value accretive. Sometimes trying to be just profitable can diminish value.  

And our shareholders have shown maturity. Investors are valuing us for the next five years, and at a profit multiple which will be far more valuable. 

It doesn’t matter if it (stock price) moves up or down. PolicyBazaar is a company to depend on for the next 5 years, not the next 2 years alone. 

With term insurance premium expected to dial up, will that have an impact on PolicyBazaar’s business? 

Dahiya: We are very comfortable with our expected growth next year. Our conversion rates are going up reflecting good growth, compared to this year.  

Bansal: As a player, we will always enjoy the good and bad both of the (insurance) industry. Maybe in our journey a partner or two will take different paths, but we work with 90% of the industry and every partner brings a unique offering. 

As long as customers get all the options to make a decision, we are good. 

What are the gaps for PB Fintech, which the company will look to fill in the coming months?

Dahiya: We will be focusing on health and term insurance while equally growing the savings side, which is an avenue of good growth. You can also expect decent growth on the PaisaBazaar business, whose revenues were down due to fall in disbursal revenues during Covid. Now, demand is coming back.  

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