South Africa’s Root Raises $ 3M and Plans to Expand Low-Code Insurance Platform to Europe – TechCrunch

Insurance companies are lagging behind other financial services in adopting digital technologies. Granted, a few unicorns have popped up from the modern digital insurance room like Tractable and Lemonade; However, this sector didn’t race on the stage since fast like say payments or loans.

With a global insurance market valued at over $ 5 trillion, there are several ways to get around be tapped despite the presence of large established companies.

A startup is carving a niche for itself in Africa. By using APIs, Root helps companies and developers get insurance products to market faster than traditional ways. The South Africa-based company has raised $ 3 million in seed funding to grow outside the country and build the infrastructure for the global digital insurance industry.

The round was attended by venture capital firms Invenfin, Base Capital, Savannah Fund, P1 Ventures, Luno and FireID, including some influential angel investors.

Root began with the premise that many barriers, including compliance and capital, were preventing software developers and companies from building and innovating in insurance.

CEO Louw Hopley told TechCrunch that he noticed in 2015 that other financial services companies had started using APIs to perfect Helping developers create products that are tailored to their offerings, nothing is built around insurance.

“We have a strong feeling that insurance companies are stuck in the 20th century. There is still a lot of paper be used even if consumer behavior has switched to digital real-time. There is a personalized environment pretty much every industry, but insurance companies are struggling to catch up, ”he said.

“And that’s exactly what we’re trying to find out, to break these barriers and wrap them behind easy-to-use APIs so people can start finding solutions for this new modern digital personalized age.”. “

Hopley launched Root in 2016 to meet this need. Jonathan Stewart joined Sales and Partnerships in 2018 as a co-founder.

Root’s first product was programmable bank accounts and cards, but it evolved to provide insurance APIs that are now its core offering.

Root plug on insurance companies that draw the products that developers and business analysts create with the help of Root and integrate them into their existing customer experiences, which can be present on a website, a chatbot or a mobile application.

Credit: root

The five year old company primarily is aimed at non-insurance companies with a permanent customer base; Companies that offer insurance as a secondary product. For example telecommunications companies, retailers and banks. However, it also supports affinity insurance players; some of the largest in South Africa actually.

These clients include Mr. Price Money, FinChoice, Telekom, Metropolitan, Sanlam and Guardrisk. With Root’s insurance infrastructure, these companies have processed millions of policies and thousands of claims every month.

The South African company makes money through subscription license fees that are based on the size and complexity of its customers’ needs.

In addition To help developers and companies adopt insurance products, Root provides channels for those companies to reach more customers and takes care of compliance issues.

With the new funding, Root intends to launch its flexible low-code digital insurance platform as it expands to other markets, particularly Europe.

Hopley doesn’t mention the countries Root will expand into; HoweverAccording to the level of the insurance industry in the region, the UK, Germany and France could top the list.

While Root plans to hire more technical and commercial talent in Europe, Hopley says a large portion of the corporate team will stay in South Africa.

However, the company’s focus, particularly as it expands into new terrain, is on developing the operating system for the global insurance industry, Hopley said.

We feel There has to be a standard platform on which people develop innovations, develop and integrate their products. Essentially, that is, we want to be the platform on which all product innovators, actuaries and developers register in order to develop insurance products and bring them to market. We feel By doing this, you can innovate much more, faster, because you are allowing sub-economies, so to speak, to develop and giving other people the opportunity to come up with specific solutions for insurance. It essentially integrates the entire industry. “

In a statement, Paul Rutherford of Base Capital said that Root’s APIs simplify the complex insurance world and improve the experience of consumers and insurers. Mikael Hajjar from P1 Ventures, on the other hand, notes that Root may be the best positioned African insurtech startup to gain market share in Europe and the US.

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