PayPal Ventures has marked its entry into the Indonesian insurance industry by investing in Qoala, an Indonesian insurtech start-up.
The investment, part of a $47 million Series C funding round, underscores PayPal's strategic move towards diversifying its portfolio in the rapidly evolving insurance market. Co-led by PayPal Ventures and MassMutual Ventures, the round also saw contributions from MUFG Innovation Partners, Omidyar Network, and several returning investors, bringing Qoala's total funding to over $130 million since its foundation.
From vehicle to health insurance, Qoala has designed its offerings to be accessible through an online platform, a mobile app, and a network of physical agents, serving more than 5 million customers.
According to Tech Crunch, PayPal Ventures' decision to invest in the insurance technology sector, starting with its backing of Qoala, comes at a time when Indonesia's insurance penetration is notably low. With a penetration rate of less than 4%, the country presents a vast untapped market for insurance services, largely due to limited awareness, affordability issues, and scepticism towards insurers.
By choosing to invest in Qoala, PayPal Ventures is tapping into Indonesia's significant demographic opportunity, where a young, digitally savvy population coincides with an underpenetrated insurance market. This move is indicative of PayPal's broader strategy to explore new growth avenues beyond its core payments business, by entering sectors like insurance that are ripe for digital disruption.
“Rather than going direct to consumers, [Qoala has] worked to leverage entrenched channels like the leading consumer-facing platforms and traditional offline brokers in Indonesia, Malaysia, Vietnam, and Thailand,” said Alexandros Bottenbruch, principal at PayPal Ventures, as reported by Tech Crunch. “By taking this approach, Qoala has successfully positioned itself as the embedded insurance solution of choice to more than 50 consumer-facing platforms and marketplaces, and the top insurance platform solution used by more than 65,000 traditional offline agents. This has resulted in more than 15x growth in gross written premium from 2020 to 2023.”
“Our mission to democratise insurance remains steadfast, and with this new infusion of funds, we are better equipped than ever to drive innovation and impact lives and livelihoods,” Qoala co-founder and chief executive Harshet Lunani said.
