Recently launched, black-owned local insurtech start-up Fo-Sho is in talks to expand its first digital insurance product beyond South Africa's borders.
Through multi-million rand angel investment from PD Naidoo Group, the start-up plans to expand to other emerging economies in Africa.
"Due to the confidential nature of the transaction and for competitive reasons, the exact amount and share allocation cannot be disclosed publicly. We will, however, use the funding primarily to develop an even more efficient user experience as well as improve its cloud infrastructure, marketing and distribution."
Naidoo adds that the company has also signed several commitments with leading sponsors including Startupbootcamp programme and has also secured funds for capital investment. "These sponsors see significant value in exploiting the Fo-Sho product offering within their ecosystems. At a policy level, it's been in line with our expectations, despite December and January being difficult months to be selling short-term insurance in South Africa."
Startupbootcamp programme is a global family of industry-focused start-up accelerator programmes covering FoodTech, Internet of things, Fintech, Smart Cities and Smart Energy. The three-month accelerator programmes are designed to support ambitious early-stage companies grow in the most relevant industries to their start-ups.
Launched in November 2017, Fo-Sho is a digital insurance product that tries to make short-term insurance with long-term benefits via self-insurance possible for everyone.
Fo-Sho co-founder and CEO, Avi Naidoo said at the time that the product relies on policyholders forming groups with similar risk profiles to create savings pools.
"This will then reduce the cost of risk financing and mitigate excess payments in the event of a claim. The app gives the consumer the power to get insurance quickly, and on their own terms in approximately three minutes. It's intuitive, facilitates immediate price checking, and incentivises inviting like-minded, risk-aligned friends to join and contribute to decreasing group premiums via a referral and bonus savings scheme."
Naidoo said that last year, the digital platform secured premium commitments in excess of R10 million, underwritten by Constantia insurance company.
"Interest in the Fo-Sho product has come from the main urban areas in SA: Johannesburg, Pretoria, Cape Town and Durban. This is in line with our distribution and marketing plan where we have amped visibility. Early adopters of a technology-driven products such as ours also tend to come from these cities.
"The demand for our products in other potential economies has posed a great concern to us. We will work to scale our offerings, once the tipping point has been reached in the domestic market. We are also looking forward expansion in other Africa countries as well as going international in the near future."
Naidoo adds that the management team has come up with strategies to facilitate the expansion. "Our primary objective is to reach the tipping point in the adoption of the product. We have some innovative enhancements that we want to take to market around mid-year, then we will focus on putting into place the elements to enable us to scale. Our main goal presently is to provide better ways of securing customers' assets."
Access to the platform is available via the Web site: https://www.f6s.com/fo-shoinsurance. The app will be made available as of April this year on Android and iOS phones.
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