Pula, a Kenyan insurtech startup that provides agricultural insurance to smallholder farmers across Africa, has closed a $6 million Series A funding round. The startup was founded by Rose Goslinga and Thomas Njeru in 2015. Pula describes itself as being “at the center of an ecosystem that helps them manage their risks with insurance and digital solutions.”

In Africa, where technological input in smallholder farming is still at a low level, farmers face risks like climate change, pest species, and crop diseases. They manage these risks without any form of insurance, putting their financial stability at risk.

Insurance is unpopular in Africa, with the continent’s insurance penetration estimated to be 2.8% in 2017. Insurance penetration is particularly low in the agricultural sector. So convincing farmers to buy insurance during favourable seasons is difficult. 

The Pula way

Pula has three products that cover challenges faced by farmers such as drought, delayed and excessive rainfalls. One such product is the Weather Index insurance. With this produc, “farmers are able to register for insurance at the point of purchase, and their names, phone numbers and details are recorded in Pula’s digitalised system for future claims purposes.”

While traditional insurance would need farm visits, Pula uses technology and data. It uses satellite imagery to predict incidences of drought as well as excessive rainfall. 

One interesting feature of Pula is that it does not sell insurance directly to farmers. Instead, it partners with banks and seed companies. Banks bundle the insurance cover when they give loans to farmers and seed companies do the same when they sell seeds to the farmers. 

This method has helped the startup to insure 185,000 farmers in Rwanda and Kenya to date. Rose Goslinga, one of the company’s founders said in this TED talk that these farmers “owned an average of half an acre and paid on average, two Euros in premium; it’s microinsurance.” It’s a compelling solution for a startup with an interesting story that’s winning with investors.

Who is in this round? 

In 2018, Pula closed a $1 million seed investment from Rocher Participations. Accion Venture Lab, Omidyar Network, and other angel investors participated in that round. The Series A round was led by TLcom Capital, with participation from Women’s World Banking.

The new financing will help the company scale in the 13 countries where it currently operates. There are also plans to expand to Asia and Latin America.

It heralds a busy period for investor activity on the continent with uLesson and Aerobotics raising a combined $24.4 million. Gro Intelligence also closed an $85 million Series B round. 

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