Luxembourg Insurtech OKO has raised £250k in a Seed round extension from Morgan Stanley to pivot its sales approach to B2B.
OKO was founded in 2018 to serve some of the 500 million farmers around the world whose livelihoods depend on the harvest and, therefore, the weather. It does this by selling microinsurance products to smallholders who purchase via mobile payment, and whose claims are automatically validated using satellite data.
Since launching, OKO has sold agricultural insurance products to around 27,000 small farmers in Mali, Ivory Coast, Uganda, Mozambique, it is now working in Angola, and South Africa and has three offices on the African continent.
“In the past, we had a B2C model and went straight to farmers through our own network of agents and this proved that there was a strong demand,” OKO CEO Simon Schwall told Silicon. He explained that this important first contact helped the startup to adapt its tools to efficiently distribute insurance products in an automated way to small farmers. “Now, to scale up faster, we realised it’s better to partner with corporate entities such as agro-dealers, banks providing agricultural loans, NGOs and even insurance agencies and brokers.”
“Now, to scale up faster, we realised it’s better to partner with corporate entities such as agro dealers, banks providing agricultural loans, NGOs and even insurance agencies and brokers.”
OKO CEO Simon Schwall
Strategic partners
The startup has now begun working with a number of firms that rely on having a secure agricultural supply chain as well as organisations working to protect vulnerable populations.
Climate change has also exacerbated the need for solutions to make agricultural activities in African countries more sustainable. According to the World Meteorological Organization the rate of temperature increase in Africa has accelerated in recent decades, with weather- and climate-related hazards becoming more severe. And yet financing for climate adaptation is only a drop in the ocean of what is needed.
“It’s true that climate change makes the seasons less predictable for the farmers. So it’s becoming even more important for them and for the whole value chain because the banks that provide loans for those farmers also need to have a higher degree of confidence that they will be repaid,” said Schwall.
OKO aims to reach about 1 million farms by 2027.
Early growth
OKO benefited from the Techstars accelerator in Israel before joining Luxembourg’s Fit 4 Start programme. Since it was founded, it has raised $1.75m with different investors, including Newfund, Mercy Corps Ventures, Katapult and now Morgan Stanley.
Currently with a team of 20, the latest cash injection, which is structured as a convertible note, will enable OKO to invest in research and development to improve the automation tools. The firm intends to also hire business developers and project managers to reach more of the estimated 500 million farmers worldwide.
