ETAP, an insurtech startup based in Nigeria, has raised $1.5 million in its pre-seed funding round. The startup, which claims to make the process of getting insurance cover easier, said it will use the funds to push its expansion across West Africa.
The recently completed pre-seed funding round was led by Mobility 54. Mobility 54 is the the venture capital (VC) arm of Toyota Tsusho and CFAO Group.
Other participants in the fundraising round include Tangerine Insurance, Graph Ventures, Newmont, as well as a number of angel investors.
While aware of the low rate of insurance cover on vehicles in Nigeria, ETAP is gunning towards expanding that number from the paltry 21% to a more appreciable number. The startup works on improving the rate of insurance cover ownership by making it possible for vehicle owners to buy insurance cover within 90 seconds. ETAP also claims to have a system in place that enable users to complete insurance claims within 3 minutes.
“We have great products and excellent value propositions. But we know that the products and value proposition can be greater and that’s why we sought out partners that we have right now. Our plan is to have the most preferred insurance products and to grow and scale this across Africa. I feel like we are perfectly positioned to achieve that,” Ibraheem Babalola, Etap founder and CEO, said.
According to a report, only one out of five vehicles in Nigeria have insurance cover. This shows the level of apathy towards vehicle insurance, and ETAP believes that the attitude of vehicle owners towards insurance is fuelled by the stress and rigour that comes with insurance procurement in the country.
“Nigeria has one of the highest risk environments in the world and an insurance penetration of less than 2% — that relationship is crazy because the higher the risk the more the propensity to want to protect yourself against events; but in Nigeria and the rest of Africa, this is not the case. This needs to change,” Babalola said.
Babalola, who founded ETAP last year, claims that he designed the company to make the process of getting insurance cover as “easy as taking a picture,” a phrase from which the startup got it name.
The founder added that the idea for the startup was born out of his experience with insurance purchases and the rigour he always went through when renewing the insurance for his vehicle.
“The idea itself is from being a frustrated customer; my insurance would expire and I wouldn’t get a notification to renew it […] I always had to make a call to a guy who would help me renew it. I thought that there is a way to do it better,” Babalola said.
Ibraheem Babalola had previously worked as an executive with a top-ranking insurance firm. He also has experience working in the finance sector, as well as real estate. He noted that his experience in these businesses are a valuable in his quest to solve the problems existing in the insurance business.
“Having all these experiences from being on the two sides; being a customer and close to the operator, and experience in building startups; I thought it’s important to reimagine insurance — To reimagine the offering, how people access it, user experience — to make it more flexible, and transparency — by building trust and giving people more value,” Babalola said.
Speaking on the fundraise, Yumi Takagi, Mobility 54’s project manager, commented thus:
“ETAP is addressing many challenges that impact the automotive experience in Africa, and we are excited to support and work with them to bring their innovation to more drivers across the continent. We believe that Etap will engage with this important role and revolutionize the automotive insurance industry with their powerful technology.”