According to sources, Acko is in talks to raise $200 million in a new round of funding that could value the online general insurance startup at $1 billion. A successful transaction will propel the startup into a rapidly growing list of newly minted Indian unicorns this year.

The Bengaluru-based firm is in advanced talks with private equity giants General Atlantic and Multiples Private Equity, as well as Warburg Pincus and TPG, for this latest round of funding. Increased interest among risk investors in the overall financial technology sector as a result of increased digital adoption caused by the ongoing pandemic is likely to help boost Acko's valuation.

"The term sheets are from a couple of funds and the (funding) round will be finalised in a month's time. It will more than double the company's valuation from $400 million in its last round," said one person privy to discussions.

Acko raised $60 million in funding last year, led by Munich Re Ventures, the strategic corporate venture capital arm of Munich Reinsurance.

In addition to the private equity funds, the so-called insurtech firm is in talks with Israel's FinTLV Ventures, a venture capital fund that focuses on insurtech and fintech companies. It's unclear whether existing investors Amazon, Accel, and Elevation Capital will join the round.

Acko, founded in 2016 by Varun Dua and Ruchi Deepak, is a provider of retail motor insurance for drivers as well as transportation services. In addition, in 2020, it will diversify its product mix to include health insurance. In addition to its retail policyholders, the insurer provides health insurance to Amazon India's registered sellers on its e-marketplace.

The startup has product and travel insurance offerings, and it has partnerships with cab aggregator Ola and online retailer Amazon for bite-sized insurance covers available through their respective apps.

According to company estimates, Acko's premium income increased to Rs 145 crore in the March quarter of fiscal 2021, up from Rs 94 crore the previous year.

While business suffered in the first half of 2020 as a result of the pandemic, the company's newly launched health business grew rapidly as a result of increased demand for medical coverage as Covid-19 spread.

According to sources close to the company, the startup is likely to cross $150-175 million in premiums in fiscal 2022, and the online insurance provider is unlikely to evaluate any IPO plans in the next two years.