Kenya’s insuretech Turaco has raised $10 million in its Series A funding led by Novastar Ventures and AfricInvest through its Cathy AfricInvest Innovation Fund (CAIF). Other participants include Enya Capital, Global Partnerships, Zephyr Acorn, Operator Stack, Asi Ventures Limited, and Push Ventures. Following the round, the total funding raised by Turaco sums up to $13.3 million.
Turaco offers an expansive distribution channel via its B2B2C which allows the startup to leverage an infinite pool of potential customers in its markets, and to offer insurance to people who have never consumed insurance offerings before. Apart from Kenya, Turaco is also present in Uganda and Nigeria.
Currently in its growth phase, the startup is looking to form partnerships that’ll drive mass market insurance adoption all over the continent. Turaco was founded by Ted Patone and Peter Gross. They both worked for MIC Global, a tech-enabled embedded insurance provider before starting Turaco.
Speaking on the startup and its goals, CEO Ted Patone said that “We want to insure a billion people in the next 25 years and that’s what we’re building towards. It’s an audacious goal in every way and I can’t even really describe how to get there, but I have a clear vision of insuring 100 million people. Getting to that next stage of growth means working with some of the largest brands in the world. We have the right mix of talent, ambition, technology, and vision to get us there. But it’s a long road ahead of us for sure.”
He also added that “Insuring a billion people is what I want to do for the rest of my life, and this is both socially impactful, as well as commercially scalable.”
Via its API integration, Turaco’s partners which include fintechs, micro-finance institutions, PAYGO companies like M-KOPA, and ride-hailing platforms like SafeBoda, are able to offer insurance alongside their core products and/or services.
Turaco says that it works individually with its partners to offer tailored offerings, and its partners’ customers can buy insurance (life, asset, medical, and vehicle insurance) from as low as $0.2. Turaco’s CEO noted that “We get typically north of a 50% conversion rate when we sell into these partnerships because the value proposition really makes sense. And people are very aware of the risks like having medical emergencies and needing to clear that hospital bill. Demand is not the issue. People actually really want to buy insurance if it’s designed appropriately for them from a price point value proposition and if it’s sold in a frictionless, efficient manner. So, most of our innovation is really around the distribution model. That’s really the key we are fixing to make it really easy for people to say yes, and then pay for insurance.”
Turaco currently has 268,000 active customers and a total of more than half a million customers. Its users have grown 300 percent since 2020 thanks to Turaco’s business model and value proposition which works for both partners and end users, according to Ted Pantone.
In a statement, AfricInvest partner and co-head of CAIF, Yassine Oussaifi, said that “As the insurance penetration in Sub-Saharan Africa remains below 3%, one of the lowest rates globally, we believe Turaco has developed the tools and know-how to fill this gap and reach low-income earners with products adapted to their needs, thus being a critical part of the push to help shield the most disadvantaged from unforeseen financial burdens and shocks.”