PayPal Ventures' latest investment is in an Indonesian startup that provides personal insurance products that cover a variety of risks, including accidents, phone screen damage, and ticket cancellations.
Qoala has secured $47 million in a new round co-led by PayPal Ventures and MassMutual Ventures, the five-year-old startup said Wednesday. Partners MUFG Innovation and Omidyar Network as well as existing backers Flourish Ventures, Eurazeo and AppWorks also participated in the Series C funding, bringing Qoala's total funding to more than $130 million since its inception.
Headquartered in Jakarta, Qoala is an insurance brokerage company that works with top local insurance companies and e-commerce companies to provide customers with customized products at affordable prices. It sells insurance coverage – ranging from automobile, motorcycle, property, personal accident, travel and health – through its website and app as well as via offline links.
Despite being the fourth most populous country in the world, Indonesia has a relatively low insurance penetration rate. According to the Indonesian Financial Services Authority, the insurance penetration rate in Indonesia is less than 4%, lower than the global average.
This low prevalence can be attributed to several factors, including limited awareness of insurance products, low disposable income among a large segment of the population, and a lack of trust in insurance companies. In addition, the Insurance Development Institute says Indonesia's insurance industry is highly fragmented, with many small players, leading to increased competition and lower profit margins, which poses a risk to the sector's growth and penetration.
The startup — which also relies on a network of more than 60,000 human workers it refers to as “agents” or marketers to sell insurance — is streamlining the claims process by uploading photos and using machine learning to detect fraud, benefiting customers and insurers from Through expansion, access to convenient and cost-effective insurance solutions.
The startup said it processed more than 115,000 claims and reached 45,000 new customers last year. Qoala, which also counts Peak XV among its backers, operates in Malaysia, Thailand and Vietnam as well as its home market of Indonesia.
Qoala revealed that its gross written premiums have risen 2.5 times since 2022, and the startup now handles up to 60% of all claims internally, although it has not revealed the exact figures.
Harshit Loonani, co-founder and CEO of Qoala, said the new funding “demonstrates the market's confidence” in the startup's strategy. “Our mission to democratize insurance remains steadfast, and with this new influx of funds, we are better equipped than ever to drive innovation and impact lives and livelihoods,” he said in a prepared statement.
Qoala plans to deploy the fresh funds to explore strategic acquisitions and partnerships as well as in deploying artificial intelligence across its channels.
“It is commendable to see what Qoala has achieved in a short period of time,” Alexandros Botenbruch, director at PayPal Ventures, said in a statement. “By positioning itself as the solution of choice for both consumer-facing platforms and traditional agents, Qoala provides consumers across Southeast Asia with much-needed tools to address the persistent protection gap.”
PayPal Ventures is no stranger to Indonesia. It also supported Gojek in 2020.
