Turaco raises $10M Series A to drive insurance adoption in Africa

Turaco, the leading insurtech driving mass market insurance adoption, has announced the close of a $10 million Series A equity round led by AfricInvest, via the Cathay Africinvest Innovation Fund, and existing investor, Novastar Ventures.

In Africa, 90% of people have no formal safety net to catch them if they get sick or are in an accident. Insurance is still very much in its infancy. Africa’s aggregate insurance penetration rate stands only at 2.78%, compared to the global average insurance penetration rate of 7.23%.

With increased entry and participation from emerging insurtech startups, the potential for growth across the continent is immense. These startups are introducing innovative insurance services that were previously not available.

Some of these services are digitising a process which formally requires lots of paperwork to sign-up new customers, creating embedded insurance APIs to help B2C digital platforms offer insurance to their customers and providing income protection claims for full-time workers for up to 6 months if their employment is terminated.

One such startup is Kenyan Turaco which has just raised a $10mn Series A equity round to accelerate and expand its efforts across the continent.

Founded in 2019, Turaco is a distributor, broker, and key customer interface between the underwriter and the end consumer. The insurtech company’s mission is to free people from the fear of financial shocks caused by unexpected health risks.

Turaco is able to achieve this through a B2B and B2B2C business model, forming partnerships with top tech-enabled companies with a large pool of customers or staff in emerging markets, including some of the continent’s most trusted brands such as Sun King, One Acre Fund, Tugende, M-KOPA and VisionFund.

Through its active partnerships, the insurtech has designed and delivered a suite of bespoke medical, life, asset, and vehicle insurance packages that have already covered over half a million lives across Nigeria, Kenya, and Uganda.

Turaco is building in a largely untapped sector, opening up an extremely large market and innovating for mass market consumers by providing a cutting-edge solution that will drive inclusive insurance through its B2B2C model.

Turaco is a low-cost insurance provider designing and delivering simple, affordable insurance to unserved and underserved customers. Our mission is to free people from the fear of financial shocks by acting as a safety net for our customers in their greatest time of need.

The Kenyan-based startup also embeds its service as a white-labelled offering that is bundled with a partner’s core product or service while integrating with their existing payment processes to collect premiums.

With a robust API integration which allows for easy collaboration with its external partners, Turaco enables companies to integrate insurance into their products and services efficiently and at no additional risk or cost.

For example, in 2019, Turaco partnered with M-KOPA, a fintech platform that provides digital financial services to underbanked customers, to embed insurance with M-KOPA’s products for the company’s customers and direct sales representatives. Now active in three countries, insurance is used to drive revenue, as well as customer and agent retention and resiliency.

Since its launch, the technology-enabled insurance platform has grown to become a market leader at the forefront of innovative insurance solutions. Turaco products are priced at ~$2/month, with straightforward terms & conditions and a fully digitised claims process that allows claimants to file via WhatsApp or phone call, paying out in less than three days via mobile money.

Commenting on the raise, Turaco CEO and co-founder Ted Pantone said, "We are proud to help drive insurance adoption, especially among low-income earners. 90% of our customers have never had insurance before, but the surprising thing is that people really want to buy insurance! They just don’t have easy access to products that really work for them. This investment enables us to scale our business to serve millions of insurance customers across our current markets and beyond. We are thrilled to have these great new investors join our team for this next season of growth.”

Cathay AfricInvest Innovation Fund, the Venture Capital arm of AfricInvest and Cathay Innovation with a fund size of €110 million also participated in the fundraise. Commenting on the fundraise, Yassine Oussaifi, Partner at AfricInvest and co-head of CAIF said, “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. We are pleased to support Turaco as it scales further and has a positive impact on the continent.”

Olúwatóyìn Emmanuel-Olubake, Investment Director at Novastar Ventures added, “Turaco has grown over 300% since Novastar’s initial investment in 2020. We are excited to continue partnering with the exceptional team at Turaco and welcome new investors including AfricInvest, Global Partnerships and Enza Capital to this journey. This capital will help the company to further grow its world-class team, develop new products, accelerate partnerships and access new markets in service of its goal to mitigate the impact of daily shocks for millions of vulnerable people across Africa.”

The round also included participation from Enza Capital, Global Partnerships, Zephyr Acorn, Operator Stack, Asi Ventures Limited, and Push Ventures.

There are over 500 million mobile subscribers in Africa, most of whom are uninsured. The latest round of funding places Turaco in a strong position to address this untapped market, doubling down its expansion efforts through strategic partnerships.

As a result, Turaco will continue to power innovation in inclusive insurance as well as stand firmly at the forefront of the continent's rapidly growing insurance sector.