The funds will enable Lumkani to enhance and grow its product offerings, reach new communities throughout South Africa, and expand its team.
At Lumkani, we are committed to providing South Africans living in informal settlements with access to financial services that have previously not been on the market. We look forward to working with our new partners 4Di Capital, Accion Venture Lab, and Lireas to strengthen our ability to reach even more underserved consumers,” said David Gluckman, Director of Lumkani.
Founded in 2015, the startup was the first one to address the safety hazards faced by informal urban settlement in Cape Town. The 2013 New Year fire tragedy that engulfed the Khayelitsha township was the starting point for this insuretech startup. The team invested a year in developing the product and received for USD 40 K from a government agency to create a prototype. The company has distributed over 17000 heat sensors and expanded to 30 communities in South Africa.
The hardware was combined with financial services last year. The detectors which sense heat rather than smoke set the pre-warning alarm in a range of 60 m radius. The heat sensors are connected with IOT and take stock of household, location, and demographics. This information is used for underwriting the insurance claims and payout.
Consumers living in informal communities experience high-density accommodation, lack of access to essential amenities, and are overexposed to fires and other disasters. Consumers in this market also face significant challenges in accessing basic financial services
“At 4Di Capital, we are excited about the potential for new technology and new data sources to create inclusion for the millions of South Africans presently not able to access financial services, as they do not have a formal address, a credit history or a KYC record, and traditional financial and risk products are unsuitably designed. Lumkani’s approach enables this effectively and affordably, potentially creating a whole new class of financial services customers,” said Justin Stanford, partner at 4Di Capital.
The early stage investment firm had made another investment in IOT Startup Sensor Networks last month. It also has tech focussed startups like Aerobotics and LifeQ.