Kenyan-based InsurTech service provider startup, Pula, has raised US$6 million in Series A fundraising.
The fundraising round was led by the early stage venture capital firm, TLcom Capital, with additional participation from the non-profit organization, Women’s World Banking.
The Series A fundraising comes after Pula raised $1 million in seed investment in 2018. The seed funding had participations from Rocher Participations, Accion Venture Lab, Omidyar Network, and other angel investors.
According to the insurTech start-up, the newly raised funds will be used to scale up operations in the company’s existing 13 markets across Africa.
Currently, Pula has worked with about 4.3 million farmers in Africa and it aims to used the new funding to propel its expansion into Asia. The Asian expansion is target at powering resilience and profitability for farmers in the Asian continent.
Pula, which was founded by Rose Goslinga and Thomas Njeru in 2015, designs and delivers innovative agricultural insurance and digital products to smallholder farmers.
“When Thomas and I launched Pula in 2015, we had one goal in mind – to build and deliver scalable insurance solutions for Africa’s 700 million smallholder farmers, and with our latest funding, now is the time to break into new ground.” – Rose Goslinga, co-founder, Pula.
“In the midst of a global pandemic, farmers need assurances now more than ever and with this in mind, it’s time to scale up. Having TLcom Capital and Women’s World Banking along on the journey with us opens up many more opportunities as we build across the continent and beyond,” Goslinga added.
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Pula, through its Area Yield Index Insurance product, leverages machine learning, crop-cut experiments and data points relating to weather patterns and farmer losses, to build products that cater to various risks.
The start-up, through its co-founder, Rose Goslinga, said that Pula does not sell insurance directly to small-scale farmers, because they can suffer from optimism bias.
She further explained that:
“Some think a climate disaster wouldn’t hit their farms for a particular season, hence, they don’t ask for insurance initially. But if they witness any of these climate risks during the season, they would want to get insurance, which is counterproductive to Pula.“
To solve this counterproductive problem, Pula says it partners with banks, instead.
According to Goslinga, banks provide loans to farmers, and make it compulsory for them to have insurance. The banks, with the loan, pay the insurance on behalf of the farmers, at the start of the season.
Reacting to the fundraising, Maurizio Caio, Managing Partner and Founder at TLcom Capital said:
“In Pula, we found a company addressing a hugely underserved market in one of Africa’s key drivers of growth and with this, an opportunity for major economic upside. The potential for the insurance market for smallholder farmers in Africa is huge and under the leadership of Rose and Thomas, Pula has rapidly established a strong presence throughout the continent and has a number of high-profile clients on their books.”
Women’s World Banking’s CIO, Christina Juhasz, also commented this:
“Given the legions of women engaged in small-hold farming and securing the food supply for communities around the globe, Women’s World Banking is delighted to partner with Pula Advisors in providing them financial safety nets against the risks of pests, disease and climate change.”
Some of Pula’s clients includes the World Food Programme, Central Bank of Nigeria, Zambian Government & the Kenyan Government.