PayPal Ventures’ latest investment is in an Indonesian startup that provides personal insurance products that cover various risks, including accidents, phone screen damage and ticket cancellations.
Qoala has secured $47 million in a new round led by PayPal Ventures and MassMutual Ventures, the five-year-old startup announced Wednesday. MUFG Innovation Partners, Omidyar Network as well as existing backers Flourish Ventures, Eurazeo and AppWorks also participated in the Series C funding, which brings Qoala’s total funding to more than $130 million since inception.
Jakarta-based Qoala is an insurance broker that partners with leading local insurers and e-commerce companies to offer customers personalized and affordable products. It sells insurance covers — ranging from auto, motorcycle, property, personal accident, travel and health — through its website and app, as well as through offline engagements.
Despite being the fourth most populous country in the world, Indonesia has a relatively low insurance penetration rate. According to the Financial Services Authority of Indonesia, Indonesia’s insurance penetration rate is below 4%, lower than the global average.
This low penetration can be attributed to various factors such as limited awareness about insurance products, low disposable income among a significant portion of the population and lack of trust in insurance companies. The Insurance Development Institute further states that the insurance industry in Indonesia is highly fragmented, with numerous small players, leading to increased competition and lower profit margins, which pose risks to industry growth and penetration.
The startup – which also relies on a network of over 60,000 human resources referred to as “agents” or marketers to sell insurance – simplifies the claims process through image uploads and uses machine learning to detect fraud, benefiting both customers and insurers by expanding access to convenient, cost-effective insurance solutions.
It processed more than 115,000 claims and reached 45,000 new customers last year, the startup said. Qoala, which also counts Peak XV among its backers, operates in Malaysia, Thailand and Vietnam in addition to its domestic market of Indonesia.
Qoala revealed that its gross written premiums have grown 2.5 times since 2022, and the startup now handles up to 60% of all claims in-house, though it did not disclose exact numbers.
Qoala co-founder and CEO Harshet Lunani 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 infusion of capital, we are better equipped than ever to drive innovation and impact lives and livelihoods,” he said in a prepared statement.
Qoala plans to use the new funds to explore strategic acquisitions and partnerships, as well as deploy artificial intelligence across its channels.
“It is commendable to see what Qoala has achieved in such a short period of time,” Alexandros Bottenbruch, Principal of PayPal Ventures, said in a statement. “Positioning itself as the solution of choice for both consumer-facing platforms and brick-and-mortar resellers, Qoala provides consumers across Southeast Asia with the tools they need to address the persistent protection gap.”
PayPal Ventures is no stranger to Indonesia. He also supported Gojek in 2020.
