Nigerian insurtech startup ETAP, has announced that it has raised $1.5-million in pre-seed funding. This raise, according to the company, will be deployed towards growing its team and facilitating the adoption of its car insurance project across Africa.
This project, which will be in the form of an app, will allow drivers to purchase insurance in as little as 90 seconds. Drivers will also be able to complete claims in less than 3 minutes and receive rewards for observing safe driving practices. This pre-seed round was led by Mobility 54 (which is the VC arm of the Toyota Group), with participation from Tangerine Insurance, Graph Ventures, Newmont, and several other angel investors.
The emergence of start-ups like ETAP is crucial to solving the Nigerian car insurance problem. According to a 2016 report by the WHO, Nigeria ranked 191 out of 192 countries in the world with unsafe roads. Despite the high rate of road accidents in the country –100,000 reported car accidents between 2019 and 2021–only about one in five cars in Nigeria are currently insured.
This apathy to insuring vehicles is partly due to the difficulties associated with securing insurance in Nigeria. Another factor is that the per capita income of Nigerians is very low and people tend not to take insurance as a priority against other financial needs.
ETAP has found a way to simplify insurance for Nigerian drivers by digitising the process, such that drivers can buy and claim insurance from their mobile phones. The startup also uses machine learning to gamify the driving experience so that drivers earn points for good driving. These points can be exchanged for vouchers or coupons which are redeemable at any point.
Unlike traditional insurance, ETAP offers drivers more flexible insurance coverage options. These include daily, weekly, monthly, quarterly and annual plans depending on their financial capacity and needs. Since the launch of its beta platform in November 2021, ETAP has covered more than 130,000 individual trips, corresponding with over 500,000 kilometres of car journeys in the country.
According to the Founder and CEO of ETAP, Ibraheem Babalola, the company believes that insurance should be available to Nigerians in the simplest of ways. “Too often, the process of buying and claiming insurance in Africa is so out of touch with the everyday reality of most people but we are changing the game and making the process just as enjoyable as any other experience that consumers access on the mobile phone,” he said.
“Just like any other digital service, we believe Nigerians should be able to buy and claim car insurance without having to ‘call a guy.’ We also believe that rewarding good drivers can be a catalyst for better driving and making our roads safer. This is why we have created Africa’s most powerful car insurance app and we are excited to have raised these funds to bring more users on board,” adds Ibraheem Babalola.