- The US$3.7m extension brings the total raised by the insurtech to the US$5.5m; It follows a US$1.8 million round led by seed-stage investment firm Accion Venture Lab last year
- According to CEO Jihan Abass, the increased cash would be utilised for business development, product and technology growth, and expansion into new nations like Egypt, Nigeria, and Uganda
- The firm intends to offer tech solutions to digitise agents and brokers, assisting them in streamlining their operations to reach a large customer base and sell online
Lami Technologies, a Kenyan-based firm, has acquired US$3.7 million in seed funding to market its insurtech solution throughout Africa.
Harlem Capital, an early-stage venture business that invests in seed-stage tech-enabled start-ups with an emphasis on minority and female founders, was in charge of the extension.
Early-stage venture capital firm Newtown Partners; Peter Bruce-Clark, a partner at New York’s research-driven venture capital firm Social Impact Capital; Caribou Honig and Jay Weintraub of InsureTech Connect, a networking platform for insurtech innovators; and senior members from Exotix Advisory, a corporate finance and M&A boutique focused on emerging and developing markets, were among those who participated in the round.
It follows a US$1.8 million round led by seed-stage investment firm Accion Venture Lab last year, which included AAIC, P1 Ventures, Consonance, Acuity Ventures, Future Africa and The Continent Venture Partners.
According to Lami founder and CEO Jihan Abass, the increased cash would be utilised for business development, product and technology growth, and expansion into new nations like Egypt, Nigeria, and Uganda.
“Lami is a forerunner in the insurance industry regarding innovation. We are happy to have found the proper partners to promote insurance use in Africa. We want to provide easy access to insurance for everyone on the continent, and we’ll keep announcing new solutions that support this goal, Lami founder and CEO Jihan Abass said.
According to Harlem Capital, Lami’s broad market reach and intelligent growth strategy appealed to them.
“We believe the next generation of fintech will integrate financial products and services such as insurance into customers’ purchase experience.
Lami’s approach to servicing people through strategic eCommerce and financial partners is the most significant way to establish user trust and provide insurance to Africans across the continent in a seamless, accessible manner.
Lami’s impressive growth demonstrates that this resonates with customers and that they have a good trajectory as they expand across the continent,” said Harlem Capital Principal Gabby Cazeau.
Roy Perlot, Lami’s current CFO, has also been named a co-founder. Perlot has worked for the company since 2020 and has helped it grow by bringing strategic leadership and deep experience from all around Africa.
Lami products resolve low insurance uptake
Lami technologies were established in 2018 to resolve the issue of low insurance uptake in Africa. This issue is caused by the slow pace of innovation in the sector, which leaves the continent to deal with sluggish and traditional paper-based systems. Lami technologies aim to address this issue.
According to the data provided by the African Insurance Organisation, the overall level of insurance penetration in Africa is 2.78 per cent, significantly lower than the global average of 7.23 per cent. Even though research indicates that expanding Africa’s lucrative insurance sector could hasten the process of creating inclusive prosperity in the region, this is the case.
It started along this road by developing and disseminating an end-to-end digital insurance platform and API that enabled companies from other industries to design customised insurance solutions for their clients.
The firm intends to offer tech solutions that will digitise agents and brokers, assisting them in streamlining their operations to reach a large customer base and sell online.
This is in line with the success of its API platform in the insurance industry. As innovation continues to influence the sector, these goals enable the digitisation of conventional insurers.
Further studies resulted in creating an insurance cover for consumer goods such as mobile phones, which may now be protected at the point of sale through Lami’s e-commerce partners. The start-up’s objective has accelerated this to create effective ways for its partners to offer seamless and economical insurance solutions to their clients via its API platform.
Lami aims to close the gap by developing technologies that reduce the cost of insurance premiums to a more manageable level for consumers. For instance, the company’s collaboration with the start-up logistics firm Sendy resulted in creating a cover that covers items on a per-trip basis and has premiums beginning at US 0.21 for goods valued at US 85. The offer covers purchases of up to US 7,600 worth of products. Claims processed through Lami are also processed in record fast, coming in at under one week as opposed to the industry average of ninety days.
Additionally, the business has collaborated with underwriters to develop an all-risk cover for buy now pay later (BNPL) transactions. The coverage, necessary to the increasing demand for BNPL products in sub-Saharan Africa, protects against payment default due to death, disability, job loss, and various other events.
Lami co-designs products with its 25 underwriting partners, who help facilitate the B2B2C distribution of insurance products through the usage of its API.
Among Lami’s partners is Lipa Later, which helps by ensuring financed products against payment default.
The API of the start-up enables banks and other organisations to offer digital insurance solutions to their consumers.
The insurance also collaborates with Sendy to provide freight operators in East Africa (Kenya, Uganda, and Tanzania) with per-trip transit insurance and Kwara to make insurance products accessible to over 60,000 SACCO members. Other customers include the e-commerce marketplace Jumia, retailer B2B and end-to-end distribution service MarketForce, and Stanbic Bank Insurance. Lami’s technology powers their bancassurance products.
Lami joined the sector in January 2020 with Griffin insurance, probably the first digital auto insurance platform aimed at consumers.
The company then shifted its focus to providing a product-agnostic API platform that facilitates digital insurance products.
This has helped the company to increase its portfolio to 85,000 insurance from 70,000 at the end of 2021 and to quadruple the premiums underwritten to US$800,000 last year; the company expects this number to surpass US$2 million this year.
The anticipated growth will be primarily driven by expanding alliances and product lines and the company’s ambitious expansion plans, which it initiated this year by entering Malawi and the Democratic Republic of the Congo (DRC) after acquiring Bluewave. The acquisition enabled Lami to access Bluewave’s clientele and technologies that provide access to micro-insurance solutions via several channels, such as USSD and WhatsApp chatbots.
Optimism for women founders
In the meantime, the increased investment in Lami serves as a source of optimism for women founders, as it occurs at a moment when funding for female-led firms in Africa continues to lag behind that of their male counterparts.
In 2021, women-owned tech start-ups raised only US$1 for every US$15 raised by African start-ups, according to McKinsey. More investment in companies like Lami would swiftly bring about the desperately needed funding parity.