Insurtech’s Pula Raises $6m funding for African Startups
What does it mean to be insured?
To be insured means to be in a contract as an individual or an entity with an insurance company, holding a contract policy that protects you or the entity from financial losses, this is common in the western worlds. The African insurance market has experienced low penetration of all types of insurance, and it makes one wonder if the African insurance market is worthy of its name. By managing the negative impact of unexpected shocks, insurance helps relieve pressure on startups, supports entrepreneurial activities, and underpins social resilience by enabling access to credit. By virtue of this, Insurtech has been able to create a better situation than before for tech startups in Africa.
The year 2020 was a record-breaking one for African tech startups, with 397 companies securing US$701.5 million worth of investments. For the sixth consecutive year, Disrupt Africa is releasing data on the tech investment ecosystem across Africa, contained in the African Tech Startups Funding Report 2020. The report details how Kenya, Nigeria, South Africa and Egypt are the premier investment destinations on the continent, with Fintech remaining the dominant sector, and the number of investors growing substantially.
The Insurtech market was launched in 2017, and when Finnovating for Africa report released its statistics at the end of the year, it had tracked only 18 startups platforms in Africa which was a poor showing. But at the end of 2018, it had tracked 50 African startups and was responsible for the growth of the likes of Click2Sure, Naked, Simply and Bismart.
In January 2021, Pula, an Insurtech platform that specialises in digital and agricultural insurance to de-risk millions of smallholder farmers across Africa closed a $6mn Series A fundraise. Pula was launched in 2015 by Rose Goslinga and Thomas Njeru. Pula designs and delivers innovative agricultural insurance and digital products to help smallholder farmers endure climate risks, improve their farming practices and bolster their incomes over time. Pula’s concentration on smallholder farmers is as a result of the farmers’ inability to access funds for premiums and are so often exposed to financial risks.
How African Startups benefit from Pula
Through its Area Yield Index Insurance product, Pula leverages machine learning, crop cuts experiments and data points relating to weather patterns and farmer losses to build products which caters for a variety of risks including drought, excessive rainfall, pests and diseases. The company’s key clientele include the likes of the World Food Program, Central Bank of Nigeria, Zambian Government & the Kenyan Government. Pula has impacted over 4.3million farmers on the continent.
While the African insurance market remains massively under-insured due to multiple barriers to entry, the Insurtech program will open up great partnership opportunities for African tech startups and financial institutions that can help accelerate startups in Africa. The funding will be crucial in helping to deepen Insurtech’s insurance penetration, and supporting African economies to prosper through agricultural development.