WorldCover, an insurance firm with operations in Uganda, Kenya, and Ghana has nabbed a USD$6 million (about Shs22.6bn) Series A funding round, eyeing to expand to more markets and accelerate growth where it’s already operating.
“We’re excited about this successful round of Series A funding as it enables us to accelerate growth in existing markets while working towards expansion into new regions. This will allow us to fulfill our ultimate vision of making the world more resilient to climate change,” Christopher Sheehan, World Cover CEO and co-founder said in a press statement.
The round, which was led by MS&AD Ventures and backed by other top firms, including Y Combinator, Western Technology Investment, Africa-focused VC, EchoVC – will help WorldCover to involve more crop growers in its insurance plan.
Founded in 2015, the firm uses cutting-edge technology, including satellites to monitor the weather and climatic changes so that it can be able to package “a crop insurance product that is simple, affordable, and effective in reducing risk from droughts and other problems.”
Reports indicate that it is the first company to instantly price rainfall insurance for smallholder farmers.
“World Cover has uniquely combined technological advances and developed a solution that allows us to support smallholder farmers caught in conditions that are worsening due to climate change,” said Christopher, according to the statement.
The startup is addressing the USD$50 to USD$100 billion in annual losses from natural disasters, of which less than 1% is insured. The uninsured 99% are concentrated in emerging markets with the risk fragmented among millions of small businesses, particularly farmers.
These farmers are often in remote areas and don’t have access to cost-effective insurance products protecting them against the devastating loss of income due to climatic conditions.
In February 2019, WorldCover made payouts to farmers in Kenya due to short-season yields falling 70% below the long-term average in the southeastern region of the country.
This resulted in a high claim rate, with nearly 3 in 4 farmers on the platform successfully receiving a claim using World Cover’s mobile unstructured supplementary service data (USSD) platform.
“Our algorithms are specifically calibrated to rainfall events by region and crop type, automatically triggering instant payouts to insured farmers through mobile money services like M-PESA,” said Jason Schapiro, World Cover Lead Engineer.
Jason furthers said, it eliminates the need for time-consuming loss assessment and other traditional insurance practices that are incompatible with serving remote farmers in emerging markets.
After registering “robust growth in current markets”, WorldCover has said it will inject more cash into its current areas of operation while preparing for global expansion into Asian and Latin American markets.
To oversee this growth, the company has hired Head of Research Melanie Bacou, former agricultural economist and data scientist at the Gates Foundation, Director of Operations Kofi Agyare, former Uber Country Manager, Ghana, and Head of Insurance Teresa Schorstein, former weather originator at Swiss Re.