MyCover.ai, the insurtech startup building Africa’s digital insurance infrastructure, has announced the close of a $1.25 million pre-seed funding round, led by Ventures Platform, aimed at expanding insurance penetration in Africa.
The round included participation from Founders Factory Africa and TechStars, who are making a follow-on investment after the startup’s participation in its 2022 Toronto Accelerator programme.
MyCover.ai, in a statement, said it will use the capital injection to bolster its in-house operations and tech talent, invest heavily in its proprietary technology and strategically expand its operations into other African markets.
Commenting on the raise, Adebowale Banjo, MyCover.ai’s CEO and co-founder noted that the current insurance landscape is plagued by fragmentation and inefficiencies that hinder distribution and adoption.
“Affordable, accessible, and frictionless insurance remains a significant challenge for many customers, and we are proud to be at the forefront of change, constructing a robust infrastructure that addresses these critical issues head-on. We are building the rails that will power the growth and adoption of insurance across Africa, and we are delighted to have the support of our new and returning investors whose deep knowledge and extensive expertise in our region will help accelerate the attainment of our objectives,” Banjo said.
Dotun Olowoporoku, general Partner at Ventures Platform, commented, “Adebowale and his team are reshaping the insurance landscape in Nigeria and have their eyes set on the wider African market, by building the much-needed insurance infrastructure on the continent. Unlike other insurtech solutions that focus on specific areas of insurance penetration among the underserved, MyCover.ai takes a collaborative approach and offers a suite of services that cover the entire spectrum of these challenges. We are confident in their vision and operational pedigree, and we are excited to support their growth as they continue to empower businesses and individuals through scalable and innovative insurance solutions”.
Market data shows that the African insurance market is on an upward trajectory, with a size that soared to $81.6 billion in 2022. The market size is projected to rise to $123.8B by 2028, exhibiting a CAGR of 7.19 per cent between 2022 – 2028.
Traditional insurers have, however, struggled to extend their services to the vast population, with insurance penetration remaining below par.
As a result, MyCover.ai, said its operations is set to become a a catalyst for change, leveraging on the growth of a young population, the rise of technology, including widespread smartphone adoption and affordable internet access, coupled with global opportunities and the exponential growth of fintech solutions,
Founded in 2021, MyCover.ai is focused on addressing the pain points that exist in the African insurance market, such as the lack of access, inadequate coverage, the unaffordability of insurance products and the poor customer experience surrounding insurance processes. By operating across three essential touchpoints, the company addresses these problems: underwriting and product development, distribution, and insurance claims, where the claims processes are streamlined for insurance companies and the end-users.
The insurtech company stated that it is on a mission to provide financial security to Africans by improving access to insurance products, while providing an open insurance API that integrates with leading insurance companies, such as Hygeia, Leadway, Sovereign Trust, AIICO Insurance and Allianz, to offer over 30 personalised insurance products, allowing other businesses and innovators to embed these insurance products into their platforms.
MyCover.ai’s collaboration with insurance companies ensures that their products are efficiently distributed through the API, offering benefits such as faster and cost-effective distribution, access to customer utilisation data, simplified onboarding and policy management processes, access to new customer segments, improved claims processes, and opportunities to develop new products.
