Mali doesn’t make the news that often when it comes to startup fundraising in Africa, but the walls are falling. Joining edtech startup Kabakoo Academies (which recently raised funds from Zoom) and solar energy startup SolarX ( which recently raised from Energy Access Ventures is OKO, a Bamako-based insurtech startup. The startup which aims to provide insurance to smallholder farmers, has secured US$1.2 million in seed funding to expand into other African countries.
“Agriculture is by far the largest source of occupation in Africa, with an estimated 33 million farms. And yet, farmers are deprived from basic financial services like insurance and loans,” said Simon Schwall, founder of OKO. “We are using technology to solve this issue and secure the income of those farmers.”
Here Is What You Need To Know
- The seed round was led by Newfund and ResiliAnce, with the participation of Mercy Corps Ventures, Techstars, ImpactAssets, and RaSa.
- The funding will be used to expand OKO’s presence in existing markets and enter new ones, beginning with the neighbouring Ivory Coast.
Why The Investors Invested
Although this investment continues the trend of investing in expat-run startups in the West African country, the investment came mostly because of the traction OKO has generated over the years. The company already has approximately 7,000 paying customers in Mali and compensated over 1,000 farmers affected by floods last year.
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Its success in Mali stems from the fact that the activities done by farmers in the West African country constitute up to 70% of the country’s GDP. Customers of OKO typically grow maize, cotton, sesame, or millet.
But the greatest attraction for investors is OKO’s presence in Uganda, a country where investment in tech startups has been increasing in recent times. Investors appear also to have been pulled in by the startup’s planned African expansion.
OKO was also incorporated in Israel, making the structuring of the investment attractive to investors who have not shown much interests in French-speaking sub-Saharan African countries.
According to Augustin Sayer, partner at Newfund, recent advances in IoT and data availability will lead to the rise of parametric insurance in Africa for the benefit of local populations.
“Simon and his team have built solid bases in Mali from which OKO can now expand in new countries and offer new insurance products,” he said.
Investment by Newfund is also its second in Africa for the France-based venture capital firm that is focused on early stage investment in France and the United States. The VC had raised more than 230 million euros as of September 2018. It had invested in Nigeria-based fintech startup FairMoney. It seems most likely to also prefer expat founders in Africa than locals.
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 investor noted on its website.
A Look At What The Startup Does
OKO, which was founded in 2017, creates low-cost mobile crop insurance products for smallholder farmers in Uganda and Mali. Claim payments on OKO are automated using satellite data and images and are accessible to anyone with a phone. OKO also works with agro-industries to help them achieve their sustainability goals and maintain their supplier relationships. In Uganda, successful pilots with ABInBev and Touton were completed.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer