Kenyan Insurance API Startup Lami Raises $3.7M Seed Extention
Kenyan insurtech firm Lami Technologies has announced that it has raised $3.7 million in a seed round led by Harlem Capital, a firm that invests in minority and female founders. Lami Technologies is developing and distributing an end-to-end digital insurance platform and API that enables companies in various sectors to create customised insurance solutions for their customers.
Other investors in the round included the early-stage venture capital firm Newtown Partners, Peter Bruce-Clark, a partner at the research-driven venture capital firm Social Impact Capital in New York, Caribou Honig and Jay Weintraub of the networking site InsureTech Connect for insurtech entrepreneurs, and senior members of the corporate finance and mergers and acquisitions boutique Exotix Advisory, which specialises in emerging market transactions. The most recent fundraising increases the insurtech’s $1.8 million seed round from the previous year.
The funding would be used by Lami, according to CEO Jihan Abass, to make hires, advance its expansion ambitions, foster collaborations with underwriters, and accelerate its operations in Egypt and Nigeria, where it recently entered. Roy Perlot, the insurtech’s CFO since 2020, has also been named a co-founder of the business.
Why The Investors Invested
Lami has experienced significant growth since its founding. The startup increased the number of policies in its portfolio from 70,000 at the end of 2021 to 85,000, and it doubled the amount of premiums underwritten to $800,000 last year. The company expects this number to increase to nearly $2 million this year.
“We believe the next wave of fintech will embed financial products and services like insurance into a customer’s purchase experience. Lami’s approach to serving people through strategic partners in e-commerce and finance is the best way to build trust with users and deliver insurance in a seamless, accessible way to Africans across the continent,” Harlem Capital principal Gabby Cazeau said.
A Look At What Lami Does
Founded in 2018, Lami co-designs products with its underwriting partners, currently 25 in number, who use its API to facilitate insurance product distribution via a B2B2C method.
The API provided by the firm enables companies such as banks to sell digital insurance products to its consumers. Lami’s API has also been connected with over 15 businesses from diverse industries, including logistics, e-commerce, banking, and finance.
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Buy now pay later startup Lipa Later, one of Lami’s partners, is supported by the company through insurance against payment default for the funded products. The insurtech collaborates with Kwara to make insurance products available to the more than 60,000 SACCO (credit union) members, as well as Sendy to enable freight carriers in East Africa (Kenya, Uganda, and Tanzania) to acquire transit insurance on a per-trip basis. Jumia, a retail B2B and end-to-end distribution platform, MarketForce, and Stanbic Bank Insurance are some of Lami’s other clients. Stanbic Bank Insurance uses Lami’s technology to power its bancassurance products.
Griffin insurance, possibly the first digital platform for auto insurance, was the consumer-facing product Lami introduced to the market in January 2020. A product-neutral API platform that powers digital insurance products was the company’s next shift.
The aggressive expansion ambitions it started this year when it entered Malawi and the Democratic Republic of the Congo (DRC) after acquiring Bluewave will be a major driver of Lami’s anticipated growth. Other factors that will contribute are growing alliances and product lines. Through the acquisition, Lami was able to access Bluewave’s clientele and technological capabilities, which allow for access to microinsurance products via a variety of channels, including USSD and WhatsApp chatbots.
With new partnerships from tech-enabled enterprises and as more insurance companies digitise, Abass predicts greater growth potential.
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“Insurance companies have realized that they cannot rely on traditional distribution channels any longer; they need to also diversify for their own financial wellbeing. And then also when it comes to digital platforms, I think they’ve also realized that it’s an easy way for them to diversify their revenue streams,” said Abass. “The landscape has really transformed since we launched our first product two years ago. People are more open to digital distribution channels. We expect to see significant growth on the B2B2C side. This is where we see a lot of opportunity as we expand into other markets.”
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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://insightsbyexperts.com/view_expert/charles-rapulu-udoh
