Lumkani, a South Africa-based technology firm specializing in fire insurance and detection equipment, recently received equity investments of undisclosed amounts from the South Africa-based venture capital firm 4Di Capital; Accion Venture Labs, a fund of US-based NGO Accion; and Lireas Holdings, a South Africa-based investment firm. The proceeds from the investment are to be used to expand Lumkani’s product offerings, staffing and service area.
Lumkani was established in 2014, and its first product was a heat-sensing fire alarm it marketed in low-income neighborhoods. Lumkani then improved the sensor so it could be networked into a web of sensors that can “in the event of fire, store GPS coordinates” to help emergency responders find the fire “and simultaneously send text-message [also known as SMS] warnings to members of the affected community.” In 2016, Lumkani partnered with South African insurer Hollard to sell a fire insurance product with its sensors. As of June 2018, the company has sold approximately 17,000 sensors to approximately 9,000 households in 30 communities in South Africa.
Founded in 2009, 4Di Capital is a venture capital firm that operates two funds: (1) the 4Di Capital Early-Stage Technology Fund 1, which specializes in equity investments in mobile technology, enterprise software systems and web services; and (2) the 4Di Exponential Tech Fund 1, which focuses on technology startups operating in the financial services, healthcare and insurance sectors. From its inception through June 2018, 4Di Capital has deployed 13 investments totaling ZAR 344 million (USD 28 million). One quarter of this amount was disbursed from the 4Di Capital Early-Stage Technology Fund 1 and the remainder was from the 4Di Exponential Tech Fund 1.
Founded in 1972, Lireas Holdings is the investment arm of Hannover Re Africa, a subsidiary of German reinsurer Hannover Re. Lireas Holdings primarily invests in the equity of smaller insurance underwriters operating in “niche” markets. For 2017, Lireas Holdings reported net income of ZAR 23 million (USD 1.9 million) and year-end capital and reserves of ZAR 210 million (USD 17 million).
Accion Venture Lab, which was created in 2011, invests “in technology and business model innovation as well as new approaches that help underserved people and small businesses benefit from the world’s formal economy.” The majority of Accion Venture Lab’s investees are seed-stage firms in the microfinance and fintech sectors. Its typical investment is an equity placement of USD 300,000 to USD 500,000. As of May 2018, its portfolio consists of 32 enterprises.
The mission of Accion is to alleviate poverty by offering services such as microenterprise loans and business training. The NGO was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions (MFIs) provide loans entrepreneurs through 64 MFIs in 32 countries in Africa, the Americas and Asia. During 2016, the network disbursed USD 10.9 billion in loans, and it held USD 4.2 billion in savings deposits as of December of that year.
By Nicholas Galimberti, Research Associate
Sources and Additional Resources
Accion press release
http://accion.org/content/south-african-insurtech-startup-lumkani-raises-seed-round-bring-insurance-underserved
Lukmani background
https://lumkani.com
4Di background
http://www.4dicapital.com/about/
4Di investment information
https://www.crunchbase.com/organization/4di-capital
Lireas website
http://www.lireas.co.za
Hannover Re annual report
https://www.hannover-re.com/1230463/annual-report-2017.pdf
MicroCapital Brief; June 11, 2018; Accion Venture Lab, YourNest Invest $1.3m for Equity Stakes in Digital Lender CredRight of India
https://www.microcapital.org/microcapital-brief-accion-venture-lab-yournest-invest-1-3m-for-equity-stakes-in-digital-lender-credright-of-india/
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