SA insurtech Investsure in R9.6m round from 4Di, Lireas Holdings, Compass Insure

SA insurtech InvestSure announced today that the company has completed their first funding round – securing R9.6-million from Hannover Re Africa subsidiaries Lireas Holdings and Compass Insure, and venture capital firm 4Di Capital.

The funding announcement follows two years of incubation that the startup received from Compass Insure.

Investsure has created what it claims is a world first — insurance that protects innocent shareholders from loss caused by allegations of management fraud and dishonesty.

The startup, which was founded in 2017 by Mbulelo Mpofana, Ignatious Nkwinika and Shane Curran, said in a statement today that the funding will help expand the business by broadening the reach of the offering with existing partners, expanding to new markets and offering the product on other trading platforms to reach more investors in South Africa.

The R9.6-million that Investsure has secured in investment will provide the insurtech startup with 18 months of runway

While Curran, who is Investsure’s CEO, declined to reveal what percentage stake the investors have taken in the startup, he was able to say that the funding will provide the startup with 18 months of runway.

He confirmed that the product is only available at present through SA investment platform Easy Equities (since May last year), but that the startup is looking to expand to other platforms, including those in Australia and the UK.

Curran confirmed as well that his startup offers the only service of its kind and that the closest alternative is a derivatives product which he said is “expensive and complicated” and not available to ordinary investors.

Investsure’s product costs shareholder about 0.60% of their respective invested amount for annual cover and the average settlement time is about one minute.

Curran said in the recent instance of the allegations around management fraud at EOH for example, shareholders that had Investsure were saved the pain of losses in the region of 50%, when the share price halved from about R32 a share to R15 or R16 a share recently.

The startup said that as share trading volumes increase in South Africa and more and more people become active on trading platforms, the uptake of this service is expected to “exponentially grow”.

“In most industries where a safety net is available – like credit card protection — it really is a no-brainer to offer the product,” it said.

In June last year, Mpofana told Ventureburn that Investsure’s funding “runs into the millions” from Compass Insure and that (at least until then) it was not raised through “typical startup funding rounds”.

In 2017, Investsure was one of four startups that each won R1-million at a pitch event run by AlphaCode, Merrill Lynch South Africa and Royal Bafokeng Holdings.

Read more: Merrill Lynch, Royal Bafokeng awards R4m to four black fintech startups
Read more: Seven SA insurtech startups to watch [Digital All Stars]
Read more: How Michael Jordaan inspired Investsure, the ‘world’s first cover for investors’

Featured image: Investsure co-founders Mbulelo Mpofana, Shane Curran, and Ignatious Nkwinika (Supplied)