The degree of funding this year for Kenyan startups has been quite significant. Digital insurance startup Turaco seems to be closing off the year with a $1.2-million seed investment which it intends to use to further scale its operations across Africa.
Here Is The Deal
- Although this round of funding was concluded in September 2019, Turaco founders CEO Ted Pantone and Peter Gross, announced in a statement that the investors who contributed to the seed round include Gan Ventures, Mercy Corps Ventures and Musha Ventures.
- Turaco hopes to use the investment to announce it presence in new markets and further develop its ongoing pilots and partnerships with businesses and fintech companies.
- Turaco is also looking at entering one or two new markets in East and West Africa next year.
Why The Investors Invested
Obviously, by breaking down the complex issues around insurance, Turaco is solving an important social problem. This is perhaps why the investors invested.
Co-founder Pantone noted this in the press release on the investment saying that Turaco was “blessed” to be able to choose from a group of investors with different specialities.
“These range from social impact and value alignment to industry understanding and connections in Silicon Valley,’’ he said.
“In our next round of funding, we are looking for additional value-aligned investors who have the capacity to support us in our vision to insure a billion people.”
One of the lead investors Mercy Corps Ventures is notable for investing in social startups with the talent, drive and technical skills to design products and services to positively impact people in fragile places and emerging markets.
‘‘Mercy Corps Ventures (MCV) makes equity or convertible debt investments in and support these bold new ventures. We look for ventures pioneering solutions in financial services, agriculture, last-mile logistics, and youth employment. We’re an early source of capital for these ventures, which we then follow up with a significant investment of our time and expertise. That includes close consultation, technical support, and leveraging Mercy Corps’ global network of 5,000 staff across 44 countries, and the many relationships we’ve built across the private and public sector,’’ the VC noted on its website.
GAN Ventures, a VC recently launched in January 2017 is also notable for investing in startups regardless of where they are. The VC has already invested in startups across Lincoln, Nebraska; Los Angeles, California; Des Moines, Iowa; Cairo, Egypt; Wellington, New Zealand; Buenos Aires, Argentina, among others.
Read also: How International Organisations Are Helping Startups In Africa
A Look At What Turaco Does
Launched in 2008, Turaco was the idea of Peter Gross who during his eight years working in financial services in sub-Saharan Africa, saw time and time again how individuals with health issues would simply avoid going to the doctor for as long as possible, growing sicker and sicker.
The Turaco idea is based around the concept of a “nano-loan” — a tiny, short-term loan of hard cash. Customers would be pre-approved for nano-loans of $10-$25, accessible when they are sick or injured and need to pay for a medical service. The money is sent to them, often in the form of mobile money, so they can immediately seek care.
The customer then pays back the loan, plus $2-$10, over a period of four weeks. While they’re paying back the loan they also receive access to telemedicine services and hospital insurance.
Turaco works in partnership with other businesses to deliver the packages to its customers.
“We learned how to design a product that is good for the customer without costing them an arm and a leg,” says Gross.
Turaco’s subscription model enables consumers to opt in for automated medical policy renewals which are bundled with their existing payments. The startup says it has insured more than 30 000 users in Kenya and Uganda.
In June, Turaco was selected to join the Catalyst Fund‘s fintech accelerator programme along with three other Africa-focused and one Brazilian startup receiving between $50 000 and $60 000 in non-equity funding.
Last year Turaco received a $40 000 grant from Villgro Kenya.
Currently based both in Atlanta and Africa, Gross, based offshore is the Head of Product while his co-founder and CEO Ted Pantone is permanently based in Nairobi, Kenya.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world