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Africa’s insurance tech platform secures $10 million Series A funding

15 Sep 2022, 11:50 am
Financial Nigeria
Africa’s insurance tech platform secures $10 million Series A funding

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There are over 500 million mobile subscribers in Africa, most of whom are uninsured, said Oluwatoyin Emmanuel-Olubake, Investment Director at Novastar Ventures.

Turaco's management team

Turaco, an insurance tech (insurtech) company driving mass market insurance adoption, today, announced the close of a $10 million Series A equity round led by AfricInvest, via the Cathay Africinvest Innovation Fund, and existing investor, Novastar Ventures. The round also included participation from Enza Capital, Global Partnerships, Zephyr Acorn, Operator Stack, Asi Ventures Limited, and Push Ventures.

Founded in 2019, Turaco is a distributor, broker, and key customer interface between the underwriter and the end consumer. The insurtech company’s mission is to free people from the fear of financial shocks caused by unexpected health risks, the company said in a statement sent to Financial Nigeria.

“Turaco is able to achieve this through a B2B and B2B2C business model, forming partnerships with top tech-enabled companies with a large pool of customers or staff in emerging markets, including some of the continent’s most trusted brands such as Sun King, One Acre Fund, Tugende, M-KOPA and VisionFund,” the statement said. “Through its active partnerships, the insurtech has designed and delivered a suite of bespoke medical, life, asset, and vehicle insurance packages that have already covered over half a million lives across Nigeria, Kenya, and Uganda.”

In Africa, 90% of the people have no formal safety net if they get sick or are involved in an accident. Targeted at underserved customers and low-income earners, Turaco said it embeds its service as a “white-labelled” (a product or service produced by one company that other companies rebrand to make it appear as if they had made it) offering that is bundled with a partner’s core product or service while integrating with their existing payment processes to collect premiums. Turaco’s API integration allows for easy collaboration with its external partners and enables companies to integrate insurance into their products and services efficiently and at no additional risk or cost.

The technology-enabled insurance platform has been growing its customer base, aiming to become a market leader at the forefront of innovative insurance solutions. Turaco products are priced at $2/month, and its claims process is fully digitised to allow claimants to file claims via WhatsApp or phone call. Pay-out is via mobile money.

"We are proud to help drive insurance adoption, especially among low-income earners,” said Turaco CEO and co-founder Ted Pantone, on the fund raising. “90% of our customers have never had insurance before, but the surprising thing is that people really want to buy insurance! They just don’t have easy access to products that really work for them. This investment enables us to scale our business to serve millions of insurance customers across our current markets and beyond. We are thrilled to have these great new investors join our team for this next season of growth.”

In Sub-Saharan Africa, insurance penetration is below 3%, said Yassine Oussaifi, Partner at AfricInvest and co-head of CAIF. He said he believes that Turaco has developed the tools and know-how to fill this gap and reach low-income earners with products adapted to their needs, thus being a critical part of the push to help shield the most disadvantaged from unforeseen financial burdens and shocks.

According to Oluwatoyin Emmanuel-Olubake, Investment Director at Novastar Ventures, there are over 500 million mobile subscribers in Africa, most of whom are uninsured. He said Turaco has grown over 300% since Novastar’s initial investment in the insurtech in 2020.

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