Lami, a Kenya-based insurance platform, has raised an impressive $1.8 million in its inaugural seed funding round.
According to TechCrunch, the round was led by Accion Venture Lab, a seed-stage investment firm that supports financial services targeted at underserved markets. Other venture capital (VC) firms that participated include AAIC, Consonance, P1 Ventures, Acuity Ventures, The Continent Venture Partners, and Future Africa.
Previously, AfroTech reported that the Future Africa Fund had invested nearly $2 million across more than 19 different African companies. The fund works in a unique way, known as a “syndicate,” where investors provide money to Future Africa, and Future Africa disburses their money throughout a network of related funds.
Lami, specifically, aims to address the insurance disparity in Africa. CEO Jihan Abass, who founded the company in 2018, told TechCrunch that her goal with the platform was to provide a more democratized, and personalized, set of insurance solutions to Africans who need it.
“For us, the main problem we wanted to solve was that 97% of Africans don’t buy insurance. We were trying to understand the methodology behind that, especially in Kenya where there are over 50 insurance companies but the penetration level is 2.4%,” she said.
Lami takes a business-to-business and business-to-consumer approach to sell insurance. Rather than relying on brick-and-mortar outlets, which may or may not have consumer trust, the platform establishes trust with the consumer so that they can provide affordable, personalized options.
“The driving force for us was making insurance widely available. We felt that building the technological infrastructure to facilitate the distribution of insurance was the best way to increase the penetration level in Africa,” Abass said.
Prior to their seed capital funding, Lami sold more than 5,000 insurance policies. The seed funding will allow the company to expand into other areas of Africa and reach more people with their proposed expansion efforts.