Through its B2B2C business strategy, Kenyan insurtech company Turaco has been able to tap into a wide pool of prospective clients in its markets, offering insurance to a population that has never consumed it before. As a result, it has acquired $10 million in Series A equity capital.
AfricInvest, through its Cathay Africinvest Innovation Fund (CAIF), and Novastar Ventures are leading the fundraising round. Enza Capital, Global Partnerships, Zephyr Acorn, Operator Stack, Asi Ventures Limited, and Push Ventures all participated, bringing the total amount of capital raised by Turaco to $13.3 million.
“We want to insure a billion people in the next 25 years and that’s what we’re building towards. It’s an audacious goal in every way and I can’t even really describe how to get there, but I have a clear vision of insuring 100 million people. Getting to that next stage of growth means working with some of the largest brands in the world. We have the right mix of talent, ambition, technology and vision to get us there. But it’s a long road ahead of us for sure,” Ted Pantone, Turaco co-founder and CEO, said.
Why The Investors Invested
The insurtech business asserts that it has acquired over 500,000 consumers, 268,000 of whom are active. Since 2020, its user base has expanded 300 percent. Pantone attributes their development to their business strategy and value offer, which works for both partners and end customers, according to him.
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“As the insurance penetration in Sub-Saharan Africa remains below 3%, one of the lowest rates globally, we believe 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,” AfricInvest and co-head of CAIF Partner Yassine Oussaifi, said in a statement.
A Look At What Turaco Does
Powered by a sustainable business strategy, the firm, which now has operations in Uganda and Nigeria, has entered its expansion phase and is seeking further partnerships in order to accelerate the adoption of mass market insurance in Africa.
Ted Pantone and Peter Gross co-founded Turaco following their employment at MIC Global (Micro-Ensure), a tech-enabled embedded insurance company.
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“Insuring a billion people is what I want to do for the rest of my life, and this is both socially impactful, as well as commercially scalable,” he said.
Partners of Turaco, such as PayGo firms (M-KOPA), ride-hailing platforms (SafeBoda), fintechs, and microfinance institutions, can package insurance with their main goods or services via API integration.
The insurtech collaborates closely with each partner to “create and sell its white-labeled insurance products.” Customers pay as little as $0.2 for life, asset, medical, and auto insurance.
“We get typically north of a 50% conversion rate when we sell into these partnerships, because the value proposition really makes sense. And people are very aware of the risks like having medical emergencies and needing to clear that hospital bill. Demand is not the issue. People actually really want to buy insurance if it’s designed appropriately for them from a price point value proposition, and if it’s sold in a frictionless, efficient manner. So, most of our innovation is really around the distribution model. That’s really the key we are fixing to make it really easy for people to say yes, and then pay for insurance,” said Pantone.
Below 3% insurance penetration in Africa is partly related to the sector’s delayed acceptance of innovation. To sign up new clients, many insurers rely on old procedures requiring agents and copious amounts of paperwork, which limits their consumer reach and hinders the acceptance of their products. However, a turning point is imminent as insurtechs such as the Kenyan insurtech Turaco deliver disruptive new technology and products to the market.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexpert