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Seven SA insurtech startups to watch [Digital All Stars]
Digital All Stars is a series of articles which aims to celebrate the best of South African digital. The articles, which will appear on Memeburn and Ventureburn, recognise and celebrate South Africa’s best digital entrepreneurs, business people, advertisers, and media professionals among others.
Insurtech. Say the word and investors are already losing their grip on their wallets. In the last two years investors have put millions of rands into startups that are promising to disrupt the way traditional insurance models work — using artificial intelligence (AI) and technology to deliver insurance more affordably and quicker to clients.
Last month Dominique Collett, head of AlphaCode, a club for fintech entrepreneurs powered by Rand Merchant Investment Holdings, noted how insurers are now taking a far more proactive approach to seize opportunities in this space and are starting to collaborate with startups.
Here then are seven SA insurtech startups to look out for.
This Joburg-based startup, founded in 2016 Avi Naidoo (pictured middle) Mithun Kalan (left) and Siva Moodley, (right), was last year part of accelerator Startbootcamp Cape Town‘s first cohort.
Fo-Sho unveiled its short-term insurance offering, which targets lower-income consumers, in November last year and purports to have secured premium commitments in excess of R10-million (read more here).
Earlier this month Naidoo told Ventureburn that the startup had carried out soft launch with its beta test groups.
“The app UX is still not at the level we want it to be at, so we are working with our underwriter to get their technology stack up to where we need it to be,” he said, adding that the startup would likely launch full digital issuance and claim management at the end of the third quarter.
The trio came together three years ago after leaving their corporate jobs to work on software for high frequency stock exchange trading.
The startup has already secured a “multi-million rand venture capital investment” from BEE investor and Alpha Vista Systems director Dempsey Naidoo (no relation). Naidoo would not disclose the exact amount of the investment but he said the deal was signed in July last year.
Just months after announcing in August last year that they had secured R5.2-million in seed funding, the Joburg startup Pineapple is preparing to launch their insurance product to market at the end of this month.
Pineapple co-founder Marnus van Heerden (pictured above, middle with fellow co-founders Matthew Elan Smith, right and Ndabenhle Junior Ngulube, left) told Ventureburn this month that the product would initially be made available to the 4000 users who had signed up for the product through the company’s website.
The startup plans to follow this up a week later with a launch to the general public, he said.
He said the startup had been live testing its app and offering to 200 users using design-thinking methodology. It follows a beta-testing period the company had with focus groups.
The startup, he said, had picked up more useful feedback on payments related issues during the live testing than in the beta version when users — knowing the system was not yet live — did not place as much importance in how trustworthy the system is they did in recent live tests.
Pineapple claims its offering differs from other peer-to-peers in that the startup has developed a way to maintain full diversification while building affinity, rather than having a trade-off between the two (see more here).
This Johannesburg-based startup claims it will offer South Africans “more affordable and transparent” credit life insurance. The startup launched its first product, which covers personal loans, on 1 June.
Yalu CEO Nkazi Sokhulu, who founded the startup last year with Tlalane Ntuli, said the startup plans to launch more products that cover other forms of credit over the next few months. These will announce be announced on www.yalu.co.za, when they go live.
Last month the Public Investment Corporation (PIC) — which oversees government employees’ pensions — revealed that it is funding the new black-owned insurtech, which was founded by two former Old Mutual managers.
Sokhulu did not want to disclose the amount that the PIC has invested in the startup. He did however confirm that the PIC have invested in the startup.
The startup began operating in January, after the two spent last year “conceptualising and thinking through the value proposition”. Earlier this month Sokhulu told Biznews in an interview last month that Yalu’s team is made up of eight people.
Click2Sure is a digital insurance platform which enables retailers, service providers, distributors and brokers to offer a selection of over 20 custom developed insurance products at the point of sale.
The Cape Town based startup was founded by ex co-founding Director of Groupon South Africa Daniel Guasco in 2016. The company works with other re-insurers, third party service providers, brand and product distributors and retailers both on and offline. It allows customers to receive immediate cover at the point of sale.
In an email to Ventureburn this week, from the UK where he is attending www.insurtechinsights.com, Guasco said Click2Sure continues to go “from strength to strength”.
However, he said the startup is currently in a quite period as it had signed a term sheet with a globally listed corporate for funding. He said he could only reveal more on information on the deal “prior to it formally closing”.
“We have more globally launched the business now which was my purpose for being in the UK. We will look to open a office in London and to date have over 20K customers and 12 integrations live including Uber, xiaomi, Takealot etc. We also working on integration with all the major retailers now,” he commented.
Click2Sure has been substantially funded by Team Africa Ventures – Daniel Guasco and business partner Wayne Gosling’s personal technology investment fund with over 13 global investments to date. In addition, it has closed a sizeable seed round extension from a group of global super angels early this year.
This startup provides fraud insurance to shareholders against losses in share price caused by actual or perceived deception committed by management. Their fraud insurance product runs on trading platforms and is targeted at individuals investing in the JSE and asset managers.
Founded by Mbulelo Mpofana (pictured above, second from left), Ignatious Nkwinika (far right) and Shane Curran (second from right) last year, the Johannesburg based startup last month launched what it claims is the “world’s first” insurance cover for investors, via local startup EasyEquities‘ investor platform (read more here).
In October last year the black-owned startup won R1-million at a pitching event run by Merrill Lynch South Africa and Royal Bafokeng Holdings.
Without disclosing just how much capital the startup has raised, Mpofana says the Investsure’s funding “runs into the millions” from Compass Insure and that it was not raised through “typical startup funding rounds”.
Following funding of R20-million from private investment group Yellowwoods and Hollard insurance group last year (read more here), insuretech startup Naked in April the startup launched its first offering, an artificial intelligence (AI) based car insurance offering.
Naked claims that it is different from other insurance providers. It says unlike existing insurance, Naked takes a fixed portion of premiums to run the business, with the balance going into a pool to cover claims.
At the end of each year, money left over in the claims pool goes to charities nominated by customers rather than towards company profits, meaning Naked’s income doesn’t depend on whether claims are paid or not.
The startup is being led by actuaries Alex Thomson and Sumarié Greybe (pictured above), formerly partners in EY’s insurance advisory business, who have spent the last decade advising many of South Africa’s largest insurance groups.
Naked claims potential customers can receive a quote, and if it’s accepted, receive cover in three minutes on the Naked website or app, without the need to talk to a call centre. The Naked app also allows customers to change their cover instantly at any time.
In 2015, three friends — tech entrepreneur Anthony Miller (pictured above, right) and two actuaries Simon Nicholson (left) and Shaun Dippnall — decided to team up and start insurance startup Simply Financial Services.
In March the Miller told Ventureburn that the startup offers life insurance at what it calls “disruptively low prices” (see the story here).
After soft-launching its first products in 2016, Simply has sold 5920 policies worth over R3-billion in cover. In addition, the startup boasts it has the first online group life offering in South Africa.
The Cape Town-based company has also raised R40-million in capital. However, the startup was largely self-funded, before securing investment in 2016 from SA insurance company Lomhold and two other private investors.
The startup’s fastest online purchase was completed in under three minutes — from start to finish. More than 60% of its online sales are completed on mobile devices.