Agri insurtech startup IBISA announced that Ankur Capital, the India-based early-stage VC fund has joined its seed round.
Luxembourg-based Insurtech startup IBISA is on a mission to empower the Agri value chain players with innovative weather protection insurance solutions.
Founded in 2019, IBISA started its operations in India with the DHAN Foundation to provide parametric insurance against drought coverage in Tamil Nadu. Fast forward to now, IBISA is scaling its operations in India with operations in Odisha, Karnataka, Telangana for coverage against excess rainfall, excess wind speed and drought. They have also opened a registered office in Feb 2022 in Bengaluru.
70% of the global food supply comes from smallholder farmers and more than 50% of the Indian workforce is into agriculture and allied sectors that contribute to just 20% of India’s GDP.
With climate change happening at a rapid scale, most of these smallholder farmers are vulnerable to unforeseen climatic conditions that lead to damage of crops. It is not that there are not any insurance solutions to cater that, but there is a huge gap between the cost of insurance and the willingness to pay premiums and the relevance of the existing insurance products and the need of the farmers.
Ritu Verma, Partner at Ankur Capital, said, “The unavailability of data has hampered the growth of the agricultural insurance industry in developing countries for decades. Legacy crop insurance involved long manual processes making them impractical for developing markets where smallholder farming is the norm, and parametric insurance has historically been unviable due to the lack of detailed climate-related datasets. We are excited to partner with IBISA to transform the scale of available parametric insurance options in countries like India with a vast addressable market.”
Maria Mateo Iborra, Co-founder and CEO of IBISA, said, “Farming is an integral part of both our societal and economic infrastructure. The impact that the war in Ukraine is having on food prices and food security seriously underscores the importance of global agriculture. And yet the support isn’t there. With IBISA, we sought to create technology that would help reduce costs for the active players in the insurance space. Finding a way to responsibly protect farmers in the event of extreme weather, by slashing distribution and operating costs, making it affordable to many groups in the value chain. And it’s no small challenge. But we’re already seeing results. A small evidence of our success is the fact that when the Philippines was hit by Typhoon Odette in Dec’21, our insurance partner, CLIMBS was able to do payouts within 10 days after the typhoon hit Philippines with IBISA’s weather protection coverage in place.”
Apart from India, IBISA has its operations in New Zealand, Guatemala, Senegal, Philippines, and other African countries. With strong insurance and reinsurance partnerships across different geographies and tailor-made products for lack of rain, excess rainfall, extreme temperatures, excess wind speed and cyclones, IBISA is able to address the needs of various Agri value chain players.
So whether there is a risk pertaining to defaults, securing the supply chain, strengthening farmer connection or increasing sustainability practices in agriculture, weather protection insurance solutions act as a tool to mitigate unforeseen climate-risks and empower organizations and ultimately farmers to increase their resilience against climate change.
The company is also in talks with a number of large lenders, food processors, and Agritech clients across different geographies to mitigate their credit risk against default, reduce their supply chain risks and increase their sustainability practices in agriculture and strengthen farmer connection with smallholder farmers in India and abroad.