Kenyan insurtech startup Bluewave is in “aggressive” fundraising mode as it looks to finance expansion after seeing strong initial uptake of its product.
Formed in 2016 and this week named winner of the Kenyan leg of the Seedstars competition, Bluewave has developed a robust microinsurance system that offers users easy access to an array of insurance products.
The startup partners with insurance companies and large aggregators such as MNOs, banks and microfinance institutions to distribute their products, making money from administration fees from every subscriber and commissions from each premium collected.
Chief executive officer (CEO) Adelaide Odhiambo said Bluewave had a specific focus on microinsurance, where it believes there is a huge market and demand as Africa is largely under-insured.
“Africa’s insurance penetration in almost all markets struggles below three per cent. By designing our microinsurance platform and using the teams’ vast experience in designing and deploying microinsurance products in Africa we believe we shall play a key role in addressing how the mass market address risk reducing its impact in their lives,” she said.
Whereas most conventional insurance products are designed with complex onboarding processes, leaving most of the distribution of insurance products heavily reliant on brokers or sales agents, Bluewave’s platform offers the African mass market easy, accessible and affordable insurance products.
“We have a niche for the underserved market with a focus on those who earn between US$60 to US$150 monthly,” said Odhiambo. “We however have a pipeline of products to release. There is a growing demand to offer insurance in a more innovative way to bridge the gap and improve insurance penetration.”
The response has been positive, with Bluewave having had almost 1,000 active customers and over 10,000 enrollments in the six months its platform has been live. It has deployed its flagship microinsurance product – Imarisha Jamii – into the Kenyan market, raised some angel funding and begun entry into Rwanda. But Odhiambo wants more funds for the startup to grow more quickly.
“Bluewave has so far been using its minimal revenues to sustain its business, and now entry into the Rwandan market. We are now aggressively fundraising with an immediate need to raise US$250,000 immediately, and later US$3 million, to support technology enhancement, operational strategies, consumer education, product-market fit, and further expansion into Nigeria, Ethiopia, Uganda and Tanzania,” she said.
Investment is also needed in consumer education, she said.
“Most of the African population in most markets has no clear understanding of exactly how insurance works. We have seen a need to hold focus groups to understand customer awareness, which is a huge barrier to insurance uptake. Consumer insights on insurance is a gap we plan to fill though very challenging at the moment,” said Odhiambo.