Business Maverick


Private funders put R427m into the SA insurtech space

Private funders put R427m into the SA insurtech space

Insurtech is a fast-growing business in South Africa and private funders are taking their place at the table.

Digital insurer Pineapple has just concluded a R400-million funding round, hot on the heels of Cape Town-based Root, which announced in September that it had raised $1.5-million for its global expansion.

Pineapple’s investment round was led by new investors Futuregrowth, Talent10 and MIC, while the business received additional support from existing investors including Old Mutual ESD, Lireas Holdings, Asisa ESD Fund and E4E Africa. 

The funding round was completed off the back of robust growth and sustainable claims ratios that significantly exceed industry standards for a newer insurance portfolio.

Pineapple co-founder and CEO Marnus van Heerden says the funding round is a testament to Pineapple’s tech and AI-powered operating model, which allows the company to service customers at 20% of the cost of traditional insurance providers.

Amrish Narrandes, head of Futuregrowth Asset Management’s Private Equity/Venture Capital, says, “Pineapple’s exceptional growth and customer-centric model exemplify a potent combination of technology and market understanding. With our R100-million investment, we are thrilled to spearhead this round, fuelling Pineapple’s journey in redefining the insurance landscape.”

Tens of thousands of customers have insured their vehicles with Pineapple. 

Its unique offering has been instrumental in extending insurance services to a new customer demographic, with nearly 50% of customers being first-time insurance buyers. It also offers buyers the opportunity to get an insurance quote online in less than two minutes.

Despite being just five years old, Pineapple has made ripples in the insurance space.

Pineapple co-founders, Ndabenhle Ngulube and Matthew Elan Smith say this funding round is expected to propel the insurtech company further while cementing its position as a catalyst for change. 

The Mineworkers Investment Company (MIC) put in an investment of  R68.5-million, underscoring MIC’s commitment to future-proofing its core portfolio through high-tech direct investments that target businesses with high growth potential, scalability, and sound management, says Nchaupe Khaole, chief investment officer of the MIC.

“We have had a long-standing interest in the insurance industry, driven by the global trend integrating technology into financial services. Pineapple’s unique value proposition lies in its robust technology infrastructure, enabling seamless and rapid onboarding of new policyholders,” he says.

Key factors contributing to MIC’s investment decision included Pineapple’s focus on broadening access to financial services by providing insurance for lower-value vehicles, predominantly owned by the younger demographic (under 35).

Root Platform aims for the global insurtech space 

In September this year, insurance technology provider Root Platform raised $1.5-million in funding from a previous investor, Invenfin – which is the venture and growth capital arm of Remgro.

The South African-based platform offers low-code, Application Programming Interface (API-first), end-to-end insurance technology solutions, assisting companies across Africa, the UK and Europe to streamline the development, distribution and management of their digital insurance products.

The platform simplifies complex insurance processes through user-friendly APIs, empowering any organisation to create and deploy innovative insurance solutions.

As an example, EasyEquities has partnered with Sanlam to deliver a life insurance product for clients where Root is the technological partner providing the API.

Root co-founder Louw Hopley says the company is eyeing expansion to the United Kingdom and the broader European market, and the latest funding round will expedite this.

“We want to continue to expand in the UK while also making strides into the rest of Europe, and this growth capital from Invenfin enables us to do just that.

“The time is right for us, as lots of insurers are realising that innovative partner insurance channels such as embedded insurance are essential, and they want to invest in the robust, API-first technology they need to get to market quickly and confidently.

“We’re excited about what is to come over the next few years for our business,” he says.

Theo van den Berg, investment executive at Invenfin, points out that Root is a great example of the type of company that Invenfin looks to invest in: “A strong team building a world-beating product that’s winning in its South African home market and has clear potential globally.” DM


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