Qoala Secures $47M Funding to Democratize Insurance

Qoala, an Indonesian insurtech startup, recently secured $47 million in funding led by PayPal Ventures and MassMutual Ventures.

An Indonesian business that offers personal insurance to more than 5 million consumers covers a range of hazards, including accidents, phone screen damage, and ticket cancellations. PayPal Ventures is the latest investor in this company.

The five-year-old business Qoala said on Wednesday that PayPal Ventures and MassMutual Ventures co-led a fresh round of funding that raised $47 million. They raised almost $130 million since its start, with additional support from MUFG Innovation Partners, Omidyar Network, Flourish Ventures, Eurazeo, and AppWorks, as well as new investors.

The Jakarta-based insurtech platform Qoala partners with leading local insurers and e-commerce companies to provide consumers with tailored, cost-effective offerings. Through its website, app, and offline engagements, it offers a variety of insurance coverage, including auto, motorcycle, property, personal accident, travel, and health.

Indonesia has a low insurance penetration rate, even though it has the fourth-highest population in the world. The Indonesian Financial Services Authority reports that, compared to the rest of the world, Indonesia’s insurance penetration rate is lower, at less than 4%.

A lack of knowledge about insurance products, low disposable income for a large percentage of the population, and distrust in insurance companies are all reasons for this low penetration. Furthermore, according to the Insurance Development Institute, the insurance business in Indonesia is very fragmented, with many small firms. This fragmentation causes increased rivalry and lower profit margins, which in turn threaten the expansion and penetration of the sector.

The startup uses machine learning to detect fraud and streamlines the claims process with image uploads. It also relies on a network of over 60,000 human workforce members it calls “agents,” or marketers, to sell insurance. The goal is to provide convenient and affordable insurance solutions to more people.

The firm, which serves more than 5 million consumers, handled over 115,000 claims and recruited 45,000 new users last year, according to the company. Qoala has operations in Indonesia, Malaysia, Thailand, and Vietnam, and it also has Peak XV as a supporter.

The startup now handles up to 60% of all claims internally, and Qoala revealed that its gross written premiums have surged by 2.5 times since 2022. However, it did not disclose the exact numbers.

The fresh capital “demonstrates market confidence” in the startup’s plan, according to Harshet Lunani, co-founder and chief executive of Qoala. “Our mission to democratize insurance remains steadfast, and with this new infusion of funds, we are better equipped than ever to drive innovation and impact lives and livelihoods,” he said in a prepared statement.

With the new capital, Qoala will investigate potential strategic acquisitions and collaborations and roll out AI to all of its channels.

In a statement, Alexandros Bottenbruch, Principal at PayPal Ventures, praised them for their “commendable” achievements in a short amount of time. “Qoala is giving consumers across Southeast Asia the tools they need to address the persistent protection gap by positioning itself as the solution of choice for both consumer-facing platforms and traditional agents.”

PayPal Ventures is no stranger to Indonesia. In 2020, it also supported Gojek.