Amenli Raises $2.3M to Insure Egyptian Consumers | YC-Backed

Insurance Penetration in Africa and the Rise of Amenli

Insurance uptake across Africa currently ranges from a modest 3% to 5%. South Africa represents a significant portion of this figure; excluding it, the continental rate falls to between 1% and 2%, despite the presence of developing financial and technological hubs like Kenya, Nigeria, and Egypt.

Technological Disruption in the African Insurance Market

The insurance sector on the continent remains relatively untouched by technological advancements. This is attributable to factors such as negative consumer experiences and substantial distribution costs for insurance providers.

Amenli: A New Approach to Insurance in Egypt

Recently, several startups, including Lami, Ctrl, and Naked, have emerged with the ambition of transforming regional markets, backed by substantial capital for expansion. Amenli, a graduate of Y Combinator’s Summer 2021 program, is extending its operations into Egypt and has announced a $2.3 million seed funding round to deliver insurance services to the Egyptian population.

Investment Details

The investment round was co-led by P1 Ventures, GFC, and Anim Fund (a Founders Fund scout fund), with participation from Costanoa VC, Liquid2 Ventures, Cliff Angels, and various angel investors.

Founding and Motivation

Amenli was established in 2020 by Shady El Tohfa, Omar Ezz El Din, and Adham Nauman. The company aims to address a $2 billion untapped insurance market within Egypt. CEO El Tohfa’s decision to explore this market stemmed from a series of personal experiences.

Personal Stories Fueling the Vision

El Tohfa recalls two instances where friends experienced the loss of their fathers. One family suffered significant financial hardship due to unpaid medical expenses, while the other was shielded from financial difficulties thanks to existing insurance coverage, despite substantial treatment costs.

Understanding the Egyptian Insurance Landscape

These experiences, combined with Nauman’s insight that insurance could be accessible to Egyptians outside of traditional employment, and the devaluation of the Egyptian pound in 2016, shaped the founders’ understanding of the importance of insurance in Egypt.

Traditional Insurance Models in Egypt

Historically, insurance in Egypt has operated through partnerships between insurance companies and banks, primarily targeting high-spending customers with substantial credit limits. Providers have largely focused on the B2B market due to a lack of tools for reaching the broader retail consumer base.

Targeting the Middle-Income Market

Amenli is focused on a middle-income demographic of approximately 50 million adults, as stated by El Tohfa.

Inefficiencies in the Current System

Obtaining insurance through traditional channels can take between three and six weeks, as insurance companies often do not prioritize individual customers. El Tohfa explains that the high cost of service makes serving individual clients economically unviable for these companies.

Amenli’s Innovative Platform

Amenli seeks to overcome these challenges. Users are prompted to answer a series of questions upon logging onto the platform, and the responses determine recommended insurance plans – encompassing life, medical, or motor coverage.

Building Independent Infrastructure

Initial attempts to partner with insurance companies for real-time quotes proved difficult, as CTO Nauman explains. Many companies lacked the necessary APIs or documentation for integration. Consequently, Amenli developed its own infrastructure, incorporating legacy calculations and a model for providing instant quotations.

Becoming a Licensed Digital Broker

Amenli also offers APIs to other insurance companies, leveraging its position as the first licensed digital insurance broker in Egypt.

Growth and Future Outlook

Since completing the Y Combinator program, Amenli has experienced significant growth, tripling its revenue according to El Tohfa. While policy sales have increased, customer growth has been more moderate, as many customers purchase multiple policies.

Speed and Efficiency

The platform now processes over 500 policies in under 10 minutes, a substantial improvement over the industry standard of at least three weeks. However, the founders believe the company is still refining its product-market fit.

Validating Market Demand

“We are still working to demonstrate that there is demand for insurance sales, as there was no prior benchmark,” El Tohfa stated. “There was a perception that Egyptians were unwilling to understand or purchase insurance. However, we’ve discovered that educated individuals in the middle-income bracket are aware of insurance, understand its value, and are eager to buy it, provided it is accessible.”

Founders’ Background

Prior to founding Amenli, El Tohfa and Nauman were founding members of Egyptian fintech company Paymob, with El Tohfa serving as CCO and Nauman as the tech lead for one of Paymob’s products.

Early Exposure to Insurtech

In 2017, while working on a microfinance product, the pair first encountered the concept of insurance. “We were captivated by the idea,” El Tohfa said. “Before that, we had limited knowledge of insurance, but it proved to be very interesting.”

Transitioning to Insurtech

This initial interest led them to pursue insurtech full-time, culminating in the launch of Amenli after meeting co-founder Omar Ezz El Din and securing an insurance brokerage license.

Future Plans and Market Growth

A year of operation supported by Y Combinator has prepared Amenli for future expansion. The CEO indicates that the new funding will be allocated to team growth, rapid scaling, and customer acquisition in a market projected to grow at a CAGR of 7% over the next five years.