PINEAPPLE said today that it has raised R80 million ($5.3m) in a Series A round to disrupt the car insurance business. Lireas Holdings, the ASISA ESD Fund, E4E, Vunani Capital, and the Old Mutual Enterprise & Supplier Development Fund are among the new funding’s backers.

“Pineapple is on a journey to improve the trust between the insurer and insured, by providing superior customer experience backed by cutting edge technology and an innovative model,” says Pineapple co-founder Marnus van Heerden. “We operate off a fixed fee and unused premiums are returned to members”.

The company said the investment would be used to expand the SA business as well as establish international collaborations, such as the one with Travelers Insurance in the United States.

Why The Investors Invested

The success of the investment, according to Pineapple’s co-founder Ndabenhle Ngulube, is due to the company’s remarkable expansion this year.

“We did not expect to grow by 200% in the first 6 months of this year, but it goes to show that customer insurance purchase behaviour is starting to shift online and that customers are becoming more astute as to the online ratings of insurance providers and not settling for second best” with respect to customer experience,” he said. 

Newly launched venture capital fund, Entrepreneurs For Entrepreneurs Africa (E4E Africa), which recently secured R135 million ($8.2m) in funding, invests in innovative startups in South Africa. The fund, which was backed by a founding investment from the SA SME Fund, aims to support business models that bring innovative, agile solutions to critical sectors of the South African economy, including the fintech sector, healthcare and the sustainable agriculture value chain, as well as those with the capacity to scale inside and outside of South Africa.

Read also:Nigerian Startups Lead African Startup Expansion Efforts In 2021, With Fintech Topping The List

“When asked what is next for Pineapple, co-founder Matthew Smith stated “We have become so obsessed with our customers. We have a long list of features that we are building to continue to make the offering and experience fun, understandable and useful. Look out for a “community orientated” feature dropping in August that will change the way people feel about insurance!” Bakang Komanyane at E4E stated as the reason why they chose Pineapple for investment. 

A Look At What The Startup Does

Pineapple is a South African InsurTech startup that has captured the attention of a large number of people. Since its launch in 2018, the company has received multiple awards both locally and internationally, including the MTN Consumer App of the Year, the Stanford Startup Award, and being the first Insurtech to be accepted into Google’s Launchpad Accelerator Program.
Pineapple entered the South African market in mid-2018 with the purpose of addressing the problem of insurance trust.

Read also:The Role Mobile Technology Plays in Africa

Old Mutual Insure underwrites the insurance products, and Hannover-Re, Pineapple’s early innovation partner, remains a reinsurer and strategic partner. 

Pineapple has recently made headlines for being the best-rated insurance company, with an average score of 4.7/5, 0.4 stars higher than their next competitor’s 4.4/5.

Pineapple is setting a precedent for what can be accomplished when young South African talent is given access to funding, solid leadership, and mentorship, potentially establishing a trend for South Africa to become a centre for producing globally scalable technology.

PINEAPPLE E4E PINEAPPLE E4E

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

South African insurtech startup Pineapple has won first prize and $1.5-million (R22-million) in VentureClash, a $5-million global venture challenge for early-stage companies, run by US-based Connecticut Innovations.

This, as the startup also revealed that it had carried out a funding round of over R5-million earlier this year.

In a live pitch event at Yale University on 17 October in front of a panel of judges, Pineapple beat nine other startups — three from the US, four from Israel and two from Canada — to come out top.

The 10 finalists were selected from over 300 vetted applicants. The news follows Pineapple’s selection in September as one of the 10 finalists.

Pineapple won first prize and $1.5-million in VentureClash following a live pitching event earlier this month

There were several prizes given out by venture capital (VC) fund Connecticut Innovations, from a total prize pool of $5-million.

Pineapple was founded in 2017 by Matthew Elan Smith, Ndabenhle Junior Ngulube and Marnus van Heerden. The startup’s app allows users to insure anything from cellphones to bicycles in the snap of a picture.

‘Close to securing US partnership’

Commenting in a call to Ventureburn today, Elan Smith said he and his co-founders would likely use the prize money to fund the development startup’s motor insurance product, which it planned to launch in the next six months.

In addition, some of the funds could go to helping the startup to further explore the US market. The startup, he said, is in “late-stage” discussions with a US partner.

Elan Smith had been based in Hartford, Connecticut for a number of months, while the startup was part of the Hartford InsurTech Hub. The cohort has since come to an end.

Read: Kenyan Startup Twiga Foods Raises $30 Million Led By Top US bank Goldman Sachs 

‘Asisa ESD Fund round was above R5m’

Elan Smith also confirmed that earlier this year the startup took a bridging round of funding from the Association for Savings and Investment SA (Asisa) Enterprise Supplier Development (ESD) Fund.

The fund, which is managed by Edge Growth, mentions the investment in its April-June 2019 quarterly report.

Reads the report: “Since launching in July 2018, Pineapple has seen more than 13 000 members join the platform, converting many to active policies in the home-content items space.

It said the trust’s investment will enable Pineapple to expand its team, develop the business further and cater for growth and working capital needs including technology and operational enhancements.

Elan Smith declined to disclose how much the round was for, but confirmed that it was higher than the R5.2-million in seed funding the startup secured from Lireas Holdings, the strategic investment arm of Hannover-Re Group Africa, in 2017.

Asisa investment principle Alex Rodrigues also declined to reveal the amount the startup got in funding, but pointed out that it one of the fund’s rules is that any single investment can’t be higher than 10% of the entire assets under management by the fund — which currently totals R450-million.

Elan Smith said the startup currently has 12 employees and is looking to make about three more hires by the first quarter of next year.

Pineapple is underwritten by Compass Insure.

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