Lami, a digital insurance product based out of Kenya, has raised $3.7 million in an extension round, further validating the 2-year old firms’s business.
Lami has created an API (application programming interface) that it sells to other business who can use it to provide custom insurance products for their customers.
The extension was subscribed by Harlem Capital, a New York based fund with a particular focus on minority and women-led startups across the world. Besides Harlem Capital, the round was participated by Newtown Partners, including several individual investors.
The extension round comes just over one year after Lami raised $1.8 million in May 2021 as the startup sought to expand. Since then, Lami has expanded into the following markets to sell its platform to businesses:
Lami’s market potential is huge in Africa, a continent that has less than 3% of insurance penetration.
Lami will also be introducing more insurance products as part of its expansion, driven by a mission to increase insurance penetration in Africa.
Speaking about the product, Jihan Abbas, Founder, Lami, said:
“On the technology side we want to cater to the entire insurance ecosystem. So, it’s not only the digital platforms that want to sell insurance products, but also to help existing players be more efficient in their distribution of products, allowing them to play a role in increasing the insurance penetration level. This includes agents and brokers – we are looking into how we can empower them to sell more policies.”
– Founder, Lami
Harlem Capital principal, Gabby Cazeau, on her part said:
“We believe the next wave of fintech will embed financial products and services like insurance into a customer’s purchase experience.
Lami’s approach to serving people through strategic partners in e-commerce and finance is the best way to build trust with users and deliver insurance in a seamless, accessible way to Africans across the continent.”
– Principal, Harlem Capital
Lami entered the market in January 2020, with a consumer-facing product, Griffin insurance, arguably the first digital car insurance platform. It then pivoted to offer a product-agnostic API platform that powers digital insurance products. This has helped it grow its portfolio to 85,000 from 70,000 policies at the end of 2021, and quadrupled the premiums underwritten to $800,000 last year — the company predicts that this will grow to over $2 million this year.
The startup’s API allows entities like banks to offer digital insurance products to their customers. Lami has also integrated its API with more than 15 entities in various sectors, including logistics, e-commerce, banking and fintech.
Some of Lami’s clients include:
One Acre Fund
Africa has seen a burst of startups that are shrinking financial products and services and adding them into a fintech application, such as Lami’s API that other applications can add.
One more example would be Nigeria’s Casava which is also on the mission to increase insurance penetration by offering insurance for as low as $120. Users get to make small weekly or monthly payments via their debit cards or USSD.
Other verticals experiencing similar innovations include virtual debit cards, Buy Now Pay Later (BNPL), and eCommerce.