Insurtech Startup Democrance Raises US$800,000 To Make Insurance Accessible To All
Grow Your Business, Not Your Inbox
You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.
UAE-based Democrance, a startup that leverages technology to make insurance accessible and affordable for the low-income population, has raised US$800,000 in its first external funding round. The regional and global investors who pitched in for this investment in Democrance includes prominent tech investors Jabbar Internet Group, and London-based global insurtech-focused VC firm Eos Venture Partners, UAE-based Turn8, F-Horizon Group from Saudi Arabia, Switzerland's Seedstars, and other angel investors from MENA, Europe, South Asia and the US.
While insurtech as a sub-set of fintech continues to generate a lot of interest among investors globally, MENA is still catching up with the rest of the world, and Democrance wants to lead the development of the sector in MENA by providing insurance to income groups that need it the most. Democrance’s platform brings together insurance and telecommunication companies, allowing users to get access to insurance through their mobile phone, even without having a bank account. The company says that only 1% of MENA’s lower-income population can access and afford micro insurance, and has set itself a target to provide access to basic life and health insurance to "15 million low-income people across the MENA region by the year 2020."
“There are a number of areas in which we will be utilizing the funds,” says Michele Grosso, co-founder and CEO, Democrance. “Number one will certainly be the technology platform itself, which we will continue to enhance and develop. A portion of the amount will be allocated to release a number of additional pilots across the MENA region, which we will be able to talk about in more detail shortly. Finally, we are looking to further grow our team and add additional skill sets to our mix,” he explains. Having worked for some of the largest insurance companies in the world like AXA and MetLife in France, Egypt and the UAE, Grosso left the corporate world in 2015 to launch Democrance.
In a statement on the funding, Samih Toukan, Chairman, Jabbar Internet Group, said, “Investing in Democrance aligns with our vision to embrace entrepreneurs in the Arab World who are willing to innovate and take risks to create something great. The technological advancement that Democrance has brought to the market is not only pivotal in terms of developing the insurance industry, but critical to society’s welfare as it is inclusive and covers the working class that would typically not have easy access to insurance.” Sam Evans, founder and General Partner, Eos Venture Partners said, "At Eos, we have a strong focus on developing markets where we believe the impact of new technology, like Democrance, can have a profound impact. Our focus as a global insurtech specialized fund is to bridge the ‘digital chasm’ between insurtech startups and traditional insurance companies. Democrance embodies this principle perfectly.”
While a social business model comes with its own set of fundraising challenges, Grosso says once they found the right investors, they were “blown away by their commitment and enthusiasm." For instance, he draws attention to the guidance Jabbar Internet Group provides Democrance with their depth of knowledge in the regional startup space, and similarly, Eos Venture Partners, he says, brings the global insurtech perspective to the startup. “I think overall the experience taught us that there is a large pool of investors out there, but that it is really important to hold out to find the right fit for your company and ideas,” says Grosso.
Michele Grosso’s tips on fundraising for aspiring entrepreneurs
1. Believe in yourself. "This is an obvious one, but if you do not believe in the potential of your ideas, nobody else will.”
2. Be passionate about what you do. "We work with large-scale industries, telecommunications and insurance that traditionally have not been very agile. Change can take a long time to take hold, and only if you are passionate about what you do day in day out will you be able to persevere in the long run.”
3. Remember that funding is a means to an end, not a stand-alone objective. "Of course, raising money is important, but it is even more important to keep a close eye on scalability and the need to commercially stand on your own two feet as soon as possible.”