Casava, which bills itself as “Nigeria’s first 100% digital insurance company,” has secured $4 million in a pre-seed round. It’s the largest pre-seed investment in an African insurtech firm.
“We saw mass adoption and knew the market needed insurance payments to be broken down. But then we noticed that as brokers, we didn’t have full control about that process and we weren’t giving people the best experience,” CEO Bode Pedro said. “We knew if we were going to take insurance to the next level, then maybe we need to control that product and be involved in product end-to-end.”
Target Global, based in Berlin, led the pre-seed round, which included participation from overseas VCs and angel investors such as Entrée Capital, Oliver Jung, Tom Blomfield, Ed Robinson, and Brandon Krieg.
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All of the local investors are founders. Uche Pedro, Babs Ogundeyi, Musty Mustapha, Shola Akinlade, Olugbenga “GB” Agboola, Honey Ogundeyi, Tosin Eniolorunda, Opeyemi Awoyemi, and others are among them.
More product launches, ranging from life and travel insurance to home and smartphone insurance, will be supported by the funding. “We have delivery, insurance, logistics insurance, it’s exciting what we’re doing,” the CEO explained. “The concept is that it’s one membership with flexible payment choices.”
Casava will also use the funds for client acquisition, growth, and the development of its product and technology stack, according to him. To integrate insurance products into its offers, the insurtech startup wants to collaborate with fintech and digital partners. It intends to get access to more than 500,000 financial service agents in this way, allowing it to reach millions of uninsured customers across the country and keep them out of poverty.
Why The Investors Invested
The investment came to Casava mostly because of the background of the CEO who is a serial founder himself. Pedro ran VisaCover, an insurance brokerage firm, before founding Casava in 2014. Casava was conceived while VisaCover was providing an alternative in the auto insurance industry by allowing drivers of Uber, which was one of its partners, to make weekly insurance payments rather than quarterly or yearly payments.
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The company has also generated considerable traction since it was launched. According to the company, it has over 66,000 customers and $16 million in insurance coverage.
A Look At What The Startup Does
After leaving VisaCover in 2016, Bode Pedro founded Casava. Pedro hired Olusegun Makinde, a former VP at JP Morgan, as the company’s chief operational officer in 2019. The team sailed through the application process for a micro-insurance license and went live in April 2021, providing millions of Nigerians with affordable and accessible insurance products.
When customers sign up for Casava’s insurance products directly through the website, mobile app, or WhatsApp, they get a month of free service with the opportunity to cancel if they don’t like it. If they persist, Pedro says Casava will provide them value-added services like executive coaching, telemedicine, and job placement.
Currently, the digital insurance platform covers health and job loss. In contrast to the former, job-loss insurance is rather uncommon in Nigeria. There is clearly a market for it: the pandemic caused 20% of Nigerian workers to lose their jobs; but, the country’s appalling unemployment rate puts the insurer at such a high risk.
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With its Income Protection product, Casava appears to have found a method to make its job-loss insurance policy work. Subscribers can cover their income for as little as $1 (500) each month, and will be paid monthly for six months if they lose their work, become sick, or handicapped, according to the firm.
“It’s been a successful product. We’re scaling it well and people are like, ‘I didn’t even know you could do this,” the CEO said. “We’re seeing companies trying to buy for their employees; even lenders are looking to get their borrowers to buy it.”
Subscribers can also use the company’s Health Insurance package, which gives them access to over 1,000 telemedicine doctors and 900 hospitals across Nigeria. There’s also HealthCash, which allows users to receive compensated for particular hospital visits for ₦250 ($0.5) to ₦300 ($0.6) every month.
As a qualified microinsurance underwriter, Casava works with reinsurance partners who guarantee a payback when claims are settled. Aside from profit, subscription fees are how it generates money.
Casava pre-seed Casava pre-seed
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