London, United Kingdom (CU)_ According to FSD Africa, a group sponsored by the Foreign, Commonwealth, and Development Office of the United Kingdom, it intends to assist in the creation of insurance unicorns in the African continent by guiding startups and assisting them in raising capital.
This year, the agency launched a 10-week training program in Nigeria and Ghana for companies it refers to as insurtechs, a word it coined to describe enterprises that leverage technology to address insurance concerns. As part of the strategy, FSD will build the capacity of ten startups in each nation every six months for the next three years.
According to Kelvin Massingham, a director at FSD Africa, “At the conclusion of the program, the startups will pitch to potential investors and they will have an opportunity to receive funding”. Alluding to firms valued at more than $1 billion, he added, “An African unicorn from Nigeria and Ghana in the insurtech space will be our ambition”. He added, “On average, innovators can receive half a million to a million dollars in early fundraising rounds”.
African businesses have attracted investors looking to capitalize on a youthful and digitally literate community that is struggling to satisfy its finance demands. Fintech firms have been fast developing, assisting some in becoming unicorns. Flutterwave Inc., a payments company focusing on Africa and emerging countries, launched a fresh funding round on Wednesday that helped increase the company’s valuation to more than $3 billion in less than a year.
FSD is now concentrating on insurance, owing to the low penetration level in several African nations. Premium income as a percentage of gross domestic product is less than 2% in both Nigeria and Ghana, showing that insurance businesses have room to grow in the West African countries. Massingham predicted that insurance firms would follow finance businesses in creating opportunities in the continent.
