Etap receives $1.5M pre-seed investment to purchase car insurance

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Etap has raised $1.5 million in pre-seed funding
Etap has raised $1.5 million in pre-seed funding

Only 21% of Nigeria’s 12 million registered vehicles have genuine motor insurance, while the rest either have fake certificates (of which most owners are unaware) or are not covered at all.

 

According to the report, a number of car owners who have legitimate insurance policies fail to renew them when they expire, which is a violation of Nigerian law, which requires that every vehicle be insured. All of these issues stem from the fact that the majority of transactions in the industry are still done manually and, in most cases, through agents, exacerbating the situation.

To bridge the gap, insurtechs such as Etap have emerged in Nigeria and across Africa in recent years to simplify the process of purchasing insurance and filing claims. Etap claims that drivers will be able to purchase insurance in 90 seconds and complete claims in three minutes.

Following a $1.5 million pre-seed funding round led by Mobility 54, the venture capital arm of Toyota Tsusho and CFAO Group, the startup is now expanding across the West African country.

“We have excellent value propositions and great products.” But we know that the products and value proposition can be improved, which is why we sought out the partners we have now. Our goal is to have the most popular insurance products and to expand and scale this throughout Africa. “I think we’re in a great position to do that,” Etap founder and CEO Ibraheem Babalola.

Tangerine Insurance, Etap’s underwriter, Graph Ventures, Newmont, and several other angel investors were among those who took part in the round.

Babalola began developing Etap last year after becoming frustrated with the complexities and delays involved in purchasing insurance. In his own words, he set out to make purchasing insurance and filing claims as simple as snapping a photo – hence the name Etap.

“The concept arose from being a dissatisfied customer; my insurance would expire and I would not receive a notification to renew it…

I had to call a guy who helped me renew it every time. “I thought there was a better way to do it,” Babalola explained, adding that policyholders receive notifications when their coverage expires and can also opt for automatic renewal.

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Babalola, who has experience building and scaling financial services and proptech startups, previously worked with an executive from a top insurance company in Nigeria, which piqued his interest in the industry.

 

“Nigeria has one of the world’s highest risk environments and an insurance penetration of less than 2% — that relationship is insane because the higher the risk, the greater the proclivity to want to protect yourself against events; but this is not the case in Nigeria and the rest of Africa.” This must change,” Babalola stated.

 

“Having all of these experiences from being on both sides; being a customer and close to the operator, and experience in building startups,” he continued, “I thought it was important to reimagine insurance — to reimagine the offering, how people access it, user experience — to make it more flexible, and transparency — by building trust and giving people more value.”

In November of last year, the startup released the beta version of its app, allowing people to purchase insurance based on their needs: per trip, daily, monthly, or yearly. However, making the process easier and more flexible is not the only factor driving Etap’s growth; the startup also tailors the price of its products based on driver behavior. They’ve also gamified the products, with customers earning and redeeming points.

“With our retail distribution, you are profiled based on a slew of data points that place you in a risk class,” he explained.

The startup’s end-to-end services also include pre-loss inspection (which is completed when you sign up) and post-accident reviews, all of which are based on images. The app includes geolocation tags, timestamps, and other features such as crash notification to help prevent fraudulent claims.

Yumi Takagi, project manager at Mobility 54, stated, “Etap is addressing many challenges that impact the African automotive experience, and we are excited to support and collaborate with them to bring their innovation to more drivers across the continent.” We believe that Etap will take on this important role and use their powerful technology to revolutionize the automotive insurance industry.”