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The recent investment into insurtech Simply Financial Services by investment group Yellowwoods will give the startup “at least three years of runway” says the startup’s CEO Anthony Miller.
Cape Town based Simply Financial Services, which Miller (pictured above, right) along with Simon Nicholson (pictured above, left) and Shaun Dippnall founded in 2016, announced on Tuesday (16 October) that it had secured a “significant multi-year funding commitment” from Yellowwoods.
Responding to Ventureburn questions yesterday (17 October), Miller would not disclose the size of the investment and the equity share that Yellowwoods will take. He however hinted that the deal is worth “tens of millions of rands”.
Simply Financial Services has sold 9283 policies worth about R6.5-billion in total cover since launch
“I can say that it’s a significant, multi-year commitment that gives us at least three years of runway and will hopefully get us to cash flow break-even. We have 30 staff already and we’re investing heavily in marketing, so you can do some maths yourself,” he told Ventureburn.
Miller added that at the end of three years, Yellowwoods “will likely” be a significant minority shareholder alongside existing shareholder Lombard and the startup’s own management team.
He said the funding will be deployed to develop Simply’s platform and product set, in addition to investments in marketing and sales as well as expansion into new markets.
The insurtech’s products, he pointed out, are “already seeing good traction” and added that the startup is in a “permanent build, measure, learn feedback loop” with new features and product enhancements added daily.
‘Sold policies worth about R6.5-billion in total cover’
“We have now sold 9283 policies worth about R6.5-billion in total cover. Our growth trajectory has been encouraging and our unit economics are improving monthly,” he added.
The growth comes, as in March, Miller told Ventureburn the startup had sold 5920 policies worth over R3-billion in cover.
Simply’s team has been focusing on improving the insurtech’s three products, namely: its family cover, domestic cover and group cover.
“We have made substantial changes to the user buying journey for the various products and have seen improvements in conversion rates as a result,” said Miller.
In the next month, the startup has plans to add what Miller said are “two significant extensions” to its group cover product.
The first is the addition of a lump-sum occupational disability product, which will offer more comprehensive disability cover. The second is a voluntary variant which enables employers to add a subset of their employees. Miller said the firm has “a few more” products in the pipeline too.
Yellowwoods investment in Simply Financial Services marks the first time the investment group has backed a principally digitally focused life insurance firm. Yellowwoods other investments in South Africa include Hollards and Clientelle.
In a statement yesterday (17 October), Yellowwoods director Scott Gilmour said there’d been a shift in the way customers interact with and purchase financial services products.
He said the group’s decision to invest in Simply was based on a number of factors. These he said include the insurtech’s flexible and exportable business model, the strength of its team, its transparent value proposition to customers, and the technology stack that underpins the business.
Yellowwoods estimates that the individual life insurance market in South Africa is worth about R110-billion in annual premiums, with the online and digital portion of the market expected to grow to more than 15% of the total market over the medium term.
Featured image (from left to right): Simply Financial Services founders head of product and Analytics Simon Nicholson and CEO Anthony Miller (Supplied)