PayPal Ventures’ latest investment is in an Indonesian startup that provides personal insurance products covering a variety of risks, including accidents, phone screen damage, and ticket cancellations to over 5 million customers.
Qoala has secured $47 million in a new round co-led by PayPal Ventures and MassMutual Ventures, the five-year-old startup said 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 its inception.
Qoala, headquartered in Jakarta, is an insurtech platform that works with top local insurers and e-commerce firms to offer customers personalized and affordable products. It sells the insurance coverage — ranging from cars, motorcycles, property, personal accidents, travel and health — through its website and app as well as via offline engagements.
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 stands at below 4%, lower than the global average.
This low penetration can be attributed to several factors, including limited awareness about insurance products, low disposable income among a significant portion of the population, and a lack of trust in insurance companies. The Insurance Development Institute additionally says that the insurance industry in Indonesia is highly fragmented, with numerous small players, leading to increased competition and lower profit margins, something that poses risk to the sector’s growth and penetration.
Additionally, half of Indonesia’s population is aged 30 years or below, something that Alexandros Bottenbruch, Principal at PayPal Ventures, told TechCrunch creates a “favorable socio-demographic profile in the region’s largest country, combined with rapidly accelerating digital adoption and low insurance penetration, make the market ripe with opportunity.”
The startup 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.