Insurtech MyCover.ai Raises $1.25M Pre-Seed Funding

MyCover.ai, the insurtech startup building Africa's digital insurance infrastructure, today announced the completion of a $1.25 million pre-seed fundraising round led by Ventures Platform. Founders Factory Africa and TechStars participated in the round, which is a follow-on investment after the start-up's participation in its 2022 Toronto Accelerator programme. MyCover.ai will use the funds to develop its in-house operations and tech personnel, invest extensively in proprietary technology, and strategically expand into other African markets.

MyCover.ai, which was founded in 2021, is devoted to addressing the problems that the African insurance market has, such as a lack of access, insufficient coverage, the high cost of insurance, and a subpar customer experience when dealing with insurance procedures. The company tackles these issues by functioning across three key touchpoints: distribution, insurance claims, and underwriting and product creation, where the claims procedures are optimised for both insurance providers and end customers. The company offers over 30 personalised insurance products through an open insurance API that integrates with top insurance providers like Hygeia, Leadway, Sovereign Trust, AIICO Insurance, and Allianz. This open insurance API enables other companies and innovators to embed these insurance products into their platforms.

By working with insurance providers, MyCover.ai makes sure that their products are effectively distributed through the API, providing advantages like quicker and more affordable distribution, access to customer usage data, streamlined policy onboarding and management procedures, access to new customer segments, enhanced claims procedures, and chances to create new products. MyCover.ai offers simple integration through its API and SDK for start-ups and enterprises wishing to include insurance in their operations, enabling smooth insurance solutions to clients and, eventually, revenue development.

The insurtech company’s mission is to provide financial security to Africans by improving access to insurance products. Nigerians, for example, are exposed to a wide range of risks and vulnerabilities daily. From health challenges to asset loss and damage and the potential loss of livelihood, the threats faced are multifaceted. According to the National Insurance Commission (NAICOM), only 0.5% of Nigeria’s population is insured. Most of the population have never purchased insurance policies and resort to out-of-pocket payments in times of loss – if they can even afford it. This dire situation leaves individuals vulnerable and struggling to recover from unfavourable incidents, often plunging them into abject poverty. In the wider African market, over half of the countries in the continent have insurance penetration rates below 2%. South Africa, however, remains a reference point of what can be achieved and exceeded on the continent, with an insurance penetration rate of 16.99%. MyCover.ai’s suite of products have been developed to close this gap and solve the previously insurmountable problem of insurance distribution in Nigeria and the rest of Africa. 

MyCover.ai’s extensive range of products have been used by businesses across various sectors and verticals, such as logistics and mobility/ride-hailing, e-commerce, BNPL platforms, fintechs and more. For instance, a third-Party Logistics company can offer on-demand Goods in Transit Coverage for goods moved on its fleet, as well as provide health insurance and personal accident cover to its riders. All claims and insurance processes can be conveniently managed in a smooth and timely manner on its platform.

Commenting on the raise, MyCover.ai’s CEO and co-founder Adebowale Banjo said, “The current insurance landscape is plagued by fragmentation and inefficiencies that hinder distribution and adoption.  Affordable, accessible, and frictionless insurance remains a significant challenge for many customers, and we are proud to be at the forefront of change, constructing a robust infrastructure that addresses these critical issues head-on. We are building the rails that will power the growth and adoption of insurance across Africa, and we are delighted to have the support of our new and returning investors whose deep knowledge and extensive expertise in our region will help accelerate the attainment of our objectives.”

Dotun Olowoporoku, General Partner at Ventures Platform, commented, “Adebowale and his team are reshaping the insurance landscape in Nigeria and have their eyes set on the wider African market, by building the much-needed insurance infrastructure on the continent. Unlike other insurtech solutions that focus on specific areas of insurance penetration among the underserved, MyCover.ai takes a collaborative approach and offers a suite of services that cover the entire spectrum of these challenges.  We are confident in their vision and operational pedigree, and we are excited to support their growth as they continue to empower businesses and individuals through scalable and innovative insurance solutions”. 

The African insurance market is on an upward trajectory, with a size that soared to $81.6B in 2022. The market size is projected to rise to $123.8B by 2028, exhibiting a CAGR of 7.19% between 2022 – 2028. Traditional insurers have, however, struggled to extend their services to the vast population, with insurance penetration remaining below par. However, with the growth of a young population, the rise of technology, including widespread smartphone adoption and affordable internet access, coupled with global opportunities and the exponential growth of fintech solutions, MyCover.ai emerges as a catalyst for change.