Ted Pantone - Afrikan Heroes

How Africa-Focused Insurtech Startup Turaco Attained 1M Active Customers in 4 Years

June 20, 2023

In an impressive feat, Turaco, the African insure-tech company committed to providing affordable insurance solutions, has announced that it has surpassed a significant milestone of insuring over 1,000,000 lives four years after it was founded in 2019. With a $10 million Series A funding secured in September 2022, Turaco has leveraged this investment to achieve rapid growth. Operating in Nigeria, Kenya, and Uganda, Turaco has successfully offered a much-needed safety net against financial shocks to mass market consumers.

Ted Pantone, the CEO and Co-Founder of Turaco

This remarkable achievement includes 350,000 new customers who joined Turaco’s insurance program within the last three months. This surge in customer uptake can be attributed to the company’s recent partnership with Airtel Money Uganda and Prudential Uganda. The overwhelming response underscores the demand for Turaco’s innovative and customer-centric products and approach. The Airtel Hospital Sente product, designed to be user-friendly and accessible, offers a simple two-step USSD sign-up process and ensures an average turnaround time of 15 hours for claims processing and payment.

To understand the significance of Turaco’s milestone, one must consider the alarming statistics in Africa. Every year, an estimated 89 million Africans face catastrophic health events, often spending up to 10% of their income on a single incident. Shockingly, these health emergencies push 14 million Africans into poverty annually. One of the contributing factors is the lack of insurance coverage, as less than 2% of individuals in East and West Africa have access to insurance. Turaco is determined to bridge this gap by expanding access to affordable and straightforward insurance products.

Turaco’s key strategy lies in forming partnerships with leading tech-enabled companies, including M-KOPA, Paga, One Acre Fund, and Vision Fund. Through these collaborations, Turaco designs white-labeled insurance products, allowing customers to sign up and pay for insurance while purchasing other goods or services. This strategic approach has proven successful, as Turaco achieves a conversion rate of over 50% when selling insurance through these partnerships. By addressing price points and ensuring a frictionless and efficient distribution model, Turaco has created a value proposition that resonates with customers and meets their specific needs.

Ted Pantone, the CEO and Co-Founder of Turaco, expressed his excitement about surpassing the 1 million customer mark, emphasizing the impact it has on individuals and communities. He said, “This number represents 1,000,000 individual mothers, fathers, children, and community members that have access to better healthcare and improved financial resiliency as a result of Turaco insurance. We are excited to continue on our path to 1 billion people insured.”

Turaco’s sustainable business strategy has facilitated its expansion, with operations now established in Uganda and Nigeria. The company is actively seeking further partnerships to accelerate the adoption of mass market insurance across Africa. The collaboration with pay-as-you-go firms like M-KOPA, ride-hailing platforms such as SafeBoda, fintech companies, and microfinance institutions allows Turaco to offer insurance bundled with their main products or services through API integration. Customers can secure life, asset, medical, and auto insurance for as little as $0.2.

Pantone emphasized the demand for insurance among Africans and the importance of designing and selling products with a focus on affordability and a seamless customer experience. He stated, “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.”

In summary, here are the key strategies that enabled Turaco achieve this milestone:

Strategic Partnerships: Turaco formed partnerships with influential tech-enabled companies, including Airtel Money Uganda, Prudential Uganda, M-KOPA, Paga, One Acre Fund, and Vision Fund. These collaborations enabled the design of white-labeled insurance products, allowing customers to easily sign up and pay for insurance while purchasing other products or services.

Customer-Centric Approach: Turaco’s commitment to customer satisfaction is evident in its innovative and simplified processes. The two-step USSD sign-up process and the average 15-hour turnaround time for claims processing and payment have resonated well with customers, highlighting the company’s dedication to providing simple and user-friendly experiences.
Addressing Urgent Needs: Turaco identified the pressing issue of catastrophic health events affecting 89 million Africans annually, leading to significant financial burdens and pushing 14 million individuals into poverty each year. By offering affordable and accessible insurance products, Turaco addresses these needs and empowers individuals with better healthcare and improved financial resilience.
API Integration with Partners: Turaco leveraged API integration to collaborate closely with partners such as PayGo firms like M-KOPA, ride-hailing platforms like SafeBoda, fintech companies, and microfinance institutions. By bundling insurance with their primary goods or services, Turaco significantly expanded its reach and achieved a high conversion rate, as low as $0.2, for life, asset, medical, and auto insurance.
Innovative Distribution Model: Recognizing the limited insurance penetration in Africa due to outdated procedures and excessive paperwork, Turaco revolutionized the distribution model. By employing disruptive technology and efficient sales processes, Turaco ensured a frictionless and efficient experience for customers, enabling a higher acceptance rate and driving demand for insurance products.

While insurance penetration in Africa remains below 3%, the emergence of insurtech companies like Turaco signifies a turning point for the industry. Traditional insurers have relied on outdated procedures that involve agents and extensive paperwork, limiting their reach and hindering product acceptance. However, disruptive technologies and innovative products introduced by insurtechs like Turaco are revolutionizing the market, promising a brighter future for insurance coverage in Africa.

Turaco customers

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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

Kenya-based Insurance Platform Turaco Raises $10M In Series A Funding Round

September 16, 2022

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.

“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.

“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.

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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://insightsbyexpert

Kenyan Digital Insurance Startup Turaco Raises $1.2m Seed Investment

December 13, 2019

The degree of funding this year for Kenyan startups has been quite significant. Digital insurance startup Turaco seems to be closing off the year with a $1.2-million seed investment which it intends to use to further scale its operations across Africa.

Here Is The Deal

Although this round of funding was concluded in September 2019, Turaco founders CEO Ted Pantone and Peter Gross, announced in a statement that the investors who contributed to the seed round include Gan Ventures, Mercy Corps Ventures and Musha Ventures.
Turaco hopes to use the investment to announce it presence in new markets and further develop its ongoing pilots and partnerships with businesses and fintech companies.
Turaco is also looking at entering one or two new markets in East and West Africa next year.

Why The Investors Invested

Obviously, by breaking down the complex issues around insurance, Turaco is solving an important social problem. This is perhaps why the investors invested.

Co-founder Pantone noted this in the press release on the investment saying that Turaco was “blessed” to be able to choose from a group of investors with different specialities.

“These range from social impact and value alignment to industry understanding and connections in Silicon Valley,’’ he said.

“In our next round of funding, we are looking for additional value-aligned investors who have the capacity to support us in our vision to insure a billion people.”

One of the lead investors 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 VC noted on its website.

GAN Ventures, a VC recently launched in January 2017 is also notable for investing in startups regardless of where they are. The VC has already invested in startups across Lincoln, Nebraska; Los Angeles, California; Des Moines, Iowa; Cairo, Egypt; Wellington, New Zealand; Buenos Aires, Argentina, among others.

A Look At What Turaco Does

Launched in 2008, Turaco was the idea of Peter Gross who during his eight years working in financial services in sub-Saharan Africa, saw time and time again how individuals with health issues would simply avoid going to the doctor for as long as possible, growing sicker and sicker.

The Turaco idea is based around the concept of a “nano-loan” — a tiny, short-term loan of hard cash. Customers would be pre-approved for nano-loans of $10-$25, accessible when they are sick or injured and need to pay for a medical service. The money is sent to them, often in the form of mobile money, so they can immediately seek care.

The customer then pays back the loan, plus $2-$10, over a period of four weeks. While they’re paying back the loan they also receive access to telemedicine services and hospital insurance.

Turaco works in partnership with other businesses to deliver the packages to its customers.

“We learned how to design a product that is good for the customer without costing them an arm and a leg,” says Gross.

Turaco’s subscription model enables consumers to opt in for automated medical policy renewals which are bundled with their existing payments. The startup says it has insured more than 30 000 users in Kenya and Uganda.

In June, Turaco was selected to join the Catalyst Fund‘s fintech accelerator programme along with three other Africa-focused and one Brazilian startup receiving between $50 000 and $60 000 in non-equity funding.

Last year Turaco received a $40 000 grant from Villgro Kenya.

Currently based both in Atlanta and Africa, Gross, based offshore is the Head of Product while his co-founder and CEO Ted Pantone is permanently based in Nairobi, Kenya.

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