Root, a Cape Town-based low-code insurance platform start-up, has closed a $3 million seed funding round to help expand its infrastructure build to support the digital insurance economy.
Primary backers Invenfin, Base Capital, Savannah Fund, P1 Ventures, FireID, and Luno were joined by a select group of high-impact angel investors for the hugely successful round.
Insurance lags behind other financial services in the adoption of digital technologies. Granted, a few unicorns have popped up from the modern digital insurance space such as Tractable and Lemonade; however, this sector hasn’t raced to the stage as quickly as say, payments or lending.
With the global insurance market worth over $5 trillion, there are different opportunities to be tapped despite the presence of large incumbents. In Africa, one startup is carving a niche for itself. By way of using APIs, Root is helping businesses and developers launch insurance products faster than the traditional way.
The cloud-native, end-to-end insurance platform was founded in 2016 to break down barriers to innovation in financial services. Root packages the “hard things” in insurance and exposes programmable insurance products through easy-to-use APIs.
“We have been following Root closely over the last few years and are delighted to be partnering with the team as they enter this new phase of scaling the business,” said Invenfin CEO Stuart Gast in a statement. “We are confident that Root is positioned to have a massively positive impact on insurance, both in South Africa and abroad.”
“As Root continues to unlock innovation in insurance, we are making it easier for innovators to put customers first and take the industry into the age of truly personalized and convenient embedded products,” says Louw Hopley, CEO, and co-founder. “Closing this funding means that we can power more innovators, globally, and accelerate the process of transformation.”
This seed round comes after a period of strong demand among affinity insurers in South Africa with Telkom, Mr. Price Money, FinChoice, and Metropolitan already making use of the company’s insurance infrastructure. Root has built up a solid reputation with the millions of policies and thousands of claims processed each month.