Insurance technology startup, WorldCover has raised $6 million in its Series A funding round from EchoVC, one of Nigeria’s most prominent venture companies.
The funding round was led by MS&AD Ventures and also had big-name investors like Y Combinator and Western Technology co-investing.
This is the latest investment from the Nigeria-based EchoVC. Importantly too, the investment in WorldCover signals EchoVC’s recent push to identify and invest in non-Nigerian startups. Currently, Nigerian startups and startups operating in Nigeria represent its largest portfolio grouping. They include startups like LifeBank, Hotels.ng, Cellulant, and Printivo.
From 2018 however, EchoVC has pursued investments in non-Nigerian startups. One such bold move was a $2.5 million investment in Kenya-based Kukua edtech company.
The investment in WorldCover also follows a similar path.
Founded in 2015, WorldCover is in the insurance business. The startup provides climate insurance for farmers and uses technology to monitor activities and climate risks for farmers.
Climate change is a big global concern today, and its exigencies are felt harshly by farmers. With climate uncertain and natural disasters like droughts and flooding very likely, farmers have become highly vulnerable today.
But the situation is even more worrisome in Africa where millions of farmers exist. Unlike developed regions of the world, farming in Africa is largely fragmentary. Many farmers are into subsistence farming and the ones who try to commercialise it don’t have large enough farms and resources to grow their business. As a result, commercial farming is underfinanced in Africa.
The risk of losing harvests and crops to climate issues puts an even more significant burden on African farmers. With many largely dependent on their agricultural products for income, one drought or flooding could send them into extreme poverty.
WorldCover exists to ensure this does not happen. Through its insurance coverage, the startup provides a lifeline for farmers in the event of such emergencies.
With feature phones still quite popular across Africa, WorldCover uses a USSD solution to reach more farmers. With USSD, farmers can select insurance plans that work for them and their farm produces.
“Weather-risk drives a lot of decisions with these farmers on what to plant when to plant, and how much to plant,” says EchoVC founder, Eghosa Omoigui.
“With the crop insurance option, the farmer says, ‘Instead of one hectare, I can now plant two or three, because I’m covered.’ ”
Meanwhile, according to TechCrunch, WorldCover uses satellite imagery, on-ground sensors, mobile phones and data analytics to create insurance options for farmers against climate impacts.
And when adverse weather occurs, farmers can simply file an insurance claim using their mobile app. Once approved, the farmer will receive insurance payment directly to their accounts.
Headquartered in the US, World Cover now operates in three African countries since it launched in 2015. It has over 30,000 users or farmers in Ghana, Uganda, and Kenya. But with its latest funding round, the startup is looking to expand to more countries.
“We’re looking at India, Mexico, Brazil, Indonesia. India could be first on an 18-month timeline for a launch,” WorldCover co-founder and chief executive Chris Sheehan.
Looking at its successful implementation so far, WorldCover could also offer some insights into how startups could disrupt the insurance business.
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