Start-up Pula raises $20m for climate insurance for African farmers
A rising star in the African insurtech sector, start-up Pula has just raised $20 million. The aim is to provide climate insurance for small-scale farmers in Africa.
At a time when climate change is thwarting all predictions in Africa, the start-up Pula is banking on insurance to help small-scale farmers become climate-resilient. As part of its development strategy, the rising star of insurtech in Africa has just completed a $20 million Series B financing round.
The fund-raising, arranged by the Swiss investment company BlueOrchard, saw the participation of the International Finance Corporation (IFC), the private sector financing arm of the World Bank Group. The Bill & Melinda Gates Foundation and Hesabu Capital also took part, as did Pula’s existing shareholders. Financial backers include the French company Baobab+, the International Fund for Agricultural Development (Ifad), the German agrochemical firm Bayer and the Shell Foundation.
Using technology
As part of its climate insurance activities, start-up Pula “leverages artificial intelligence (AI), field data collection mechanisms, mobile-based recording systems, remote sensing and end-to-end automation tools. Their digital platform has enabled them to expand into new geographies with ease and efficiency, while keeping set-up costs low,” explains Richard Hardy, Private Equity Investment Director for Africa at BlueOrchard.
The start-up combines insurance with other products, including improved seeds and credit. According to investor BlueOrchard, “this strategy has enabled Pula to position itself as the largest insurtech in the climate and agricultural insurance space in Africa. Pula’s efforts have increased the uptake of insurance among farmers who had never taken out insurance before, giving them the means to protect their livelihoods”.
Significant impact, but not enough
The recent raising of $20 million will enable the start-up to expand its activities over the next five years. Pula is already present in Kenya, Nigeria, Zambia, Malawi and Mozambique, and intends to continue expanding its activities in Asia and Latin America. Currently, the Nairobi, Kenya-based start-up is involved in climate insurance programmes that benefit 15 million small-scale farmers in 22 countries.
A significant impact, but one that is still insufficient, given that around 80% of small-scale farmers in the developing world have no access to formal insurance. This figure rises to 97% in Africa. Yet Africa remains the continent most exposed to extreme weather events that affect the livelihoods of rural populations.
