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Onsurity, an Indian startup that offers monthly subscription-based insurance solutions to micro, small and medium enterprises, startups and growing businesses, has raised $24 million in a funding round led by the World Bank’s International Finance Corporation (IFC).

The Series B round also saw the participation from existing investors Nexus Venture Partners and Quona Capital. With the fresh funding, the three-year-old startup has raised $40 million in total.

India has over 63 million micro, small and medium enterprises (MSMEs), covering close to 400 million employees and supporting 675 million families. However, traditional players predominantly offer motor, retail health and large corporate insurance programs to cater to a larger population. One key reason for the established insurance companies not to focus on enterprise customers is the country’s low penetration of insurance in general. According to the government’s Economic Survey 2022–23, insurance penetration in India was 4.2% in 2021.

Onsurity aims to fill the gap with its suite of offerings designed specifically for MSMEs enterprises and emerging businesses. It also integrates healthcare and wellness benefits to let enterprises — irrespective of their size — allow their employees to access health checkups, fitness membership, doctor consultation and discounted medicines, among other services.

Further, the Bengaluru-based startup recently expanded its product line by introducing cyber risk insurance to let businesses protect their online presence with dedicated coverage against privacy and security breach instances. It also offers other business products including D&O liability insurance and commercial general insurance under Onsurity Plus.

“We are not competing with large insurance players or large distributors in India to take our space. We are just creating our own category,” said Yogesh Agarwal, founder and CEO of Onsurity, in an interview.

Agarwal founded the startup along with Kulin Shah (COO) in February 2020. Both co-founders have experience working in the insurance sector. Agarwal previously worked at Universal Sompo General Insurance and Shriram General Insurance, while Shah spent over two and a half years as vice president at Acko General Insurance.

Onsurity works with about five insurance partners and four to five companies in the healthcare and wellness services space. Agarwal said the startup has partnered with some of the world’s top reinsurers, without disclosing their names.

“We work with insurance companies, where we can do a deep integration with them when it comes to embedding insurance in our overall kitty,” Shah told TechCrunch.

Onsurity has also started partnering with hospitals directly, with more than 100 hospitals already onboarded, to ease in solving customer claims and boost its healthcare integration.

“At the end of the day, if I don’t get a great claims experience from my insurance company, my faith in insurance is lost,” Shah said.

Traditional insurers including ICICI Lombard and Tata AIA also have specific insurance offerings for MSMEs in the country. However, Agarwal said Onsurity offers a complete package, with health, life and accidental insurance, as well as access to health checkups, teleconsultations, and OPD benefits, to deliver a distinctive experience to enterprise customers.

The startup has also made its solutions available to enterprises with teams as small as three or seven people, unlike established insurance companies, Shah added.

Currently, Onsurity serves over 5,000 enterprise customers, reaching over a million people across 26 Indian states and three union territories. Its members include business executives, startup employees and gig workers as well as their dependents. As much as 80% of Onsurity’s total portfolio comprises SMEs, with over half its member base composed of blue-collar workers and close to 40% coming from tier-II and tier-III cities.

Onsurity has crossed over $12 million (100 crores Indian rupees) in annual revenue and is projecting 10x growth over the next two years. Since its Series A funding in 2021, the startup has seen a 17x increase in revenue, per the co-founders.

“There is a definite path to profitability, given the kind of no cost of acquisition that we have and our unique distribution channels,” Shah said.

With the fresh funds, Onsurity aims to grow its customer base to over 50,000 companies, providing coverage to over 5 million lives by 2026. The startup also plans to continue to invest in technology to stay relevant in the competition and make it easier for its members to attain settlements. Additionally, it is looking to build an AI engine to identify the right product to propose to specific SME customers by determining their risks. There are also plans to enhance its outreach over time and reach more customers, Agarwal told TechCrunch.

“The availability of insurance coverage is vital for economic risk management and bolstering social security. Our recent funding underscores our dedication to a technology platform that improves accessibility of employer-sponsored health insurance services,” said Wendy Werner, IFC country head, India, in a prepared statement. “Out-of-pocket healthcare expenses can be a significant burden for employees of SMEs. Health insurance helps SMEs manage their expenses while supporting their employees.”

Onsurity has a team size of 300 employees, with 20% located in cities other than Bengaluru. It plans to hire more people to bolster its presence over time.