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Kenyan insurtech startup Pula raises $6M Series A to derisk smallholder farmers across Africa

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Pula, a Kenyan insurtech startup that specialises in digital and agricultural insurance to derisk millions of smallholder farmers across Africa, has closed a Series A investment of $6 million.

The round was led by Pan-African early-stage venture capital firm,  TLcom Capital, with participation from nonprofit Women’s World Banking. The raise comes after Pula closed $1 million in seed investment from Rocher Participations with support from Accion Venture Lab, Omidyar Network and several angel investors in 2018.  

Founded by Rose Goslinga and Thomas Njeru in 2015, Pula delivers agricultural insurance and digital products to help smallholder farmers navigate climate risks, improve their farming practices and bolster their incomes over time.

Agriculture insurance has traditionally relied on farm business. In the U.S. or Europe with typically large farms, an average insurance premium is $1,000. But in Africa, where smallholding or small-scale farms are the norms, the number stands at an average of $4.

It is particularly telling that the value of agricultural insurance premiums in Africa represents less than 1 percent of the world’s total when the continent has 17 percent of the world’s arable land. 

This disparity stems from the fact that the traditional method of calculating insurance through farm visits is often unaffordable for these smallholder farmers. Thus, they are often neglected from financial protection against climate risks like flood, drought, pestilence and hail.

Pula is solving this problem by using technology and data. Through its Area Yield Index Insurance product, the insurtech startup leverages machine learning, crop cuts experiments and data points relating to weather patterns and farmer losses, to build products that cater to various risks.

But getting farmers on board has never been easy, Goslinga told TechCrunch. According to her, Pula has understood not to sell insurance directly to small-scale farmers, because they can suffer from optimism bias. “Some think a climate disaster wouldn’t hit their farms for a particular season; hence, they don’t ask for insurance initially. But if they witness any of these climate risks during the season, they would want to get insurance, which is counterproductive to Pula,” said the founder in a phone call.

Image Credits: Pula

So the startup instead partners with banks. Banks provide loans to farmers and make it compulsory for them to have insurance. With the loan, banks can pay the insurance on behalf of the farmers at the start of the season. But at the end of the season, the farmer has to repay the loan with interest.

“The unit economics doesn’t work for us to work with farmers directly. But with banks, we know they provide loans to farmers with much better margins to pay for insurance. Also, we work together with government subsidy programs since they’re also interested in protecting their farmers.”

Through its partnerships with banks, governments and agricultural input companies, Pula is at the center of an ecosystem that provides insurance to smallholder farmers and has amassed 50 insurance partners and six reinsurance partners. 

Its clientele includes the likes of the World Food Programme and Central Bank of Nigeria as well as the Zambian and Kenyan governments. Social enterprises like One Acre Fund, startups like Apollo Agriculture, and agribusiness giants like Flour Mills and Export Trading Group are also among Pula’s clients.

Co-CEOs with agricultural backgrounds

When Goslinga met Njeru in 2008, she worked for Syngenta Foundation for Sustainable Agriculture (SFSA). There, she started Kilimo Salama, as a micro-insurance program for more than 200,000 farmers in Kenya and Rwanda. She met Njeru who was the lead actuary at UAP Insurance, a partner to the Kilimo Salama program, at the time.

After staying with Syngenta for six years and recognising the need to provide standard insurance products for smallholder farmers, Goslinga left to start Pula with Njeru in 2015. However, it wasn’t until two years later that Njeru joined fulltime as he had a six-year engagement with Deloitte South Africa from 2012 as a consultant actuary. The pair both act as co-CEOs.

“When Thomas and I launched Pula in 2015, we had one goal in mind: to build and deliver scalable insurance solutions for Africa’s 700 million smallholder farmers,” Goslinga said. “With our latest funding, now is the time to break into new ground. In our five years since launching, we’ve built strong traction for our products. However, the fact remains that across Africa and other emerging markets, there are still millions of smallholder farmers with risks to their livelihoods that have not been covered.”

According to Goslinga, the COVID-19 pandemic helped Pula double its footprint and size as rural farming activities and operations continued despite pandemic-induced lockdowns. 

Pula co-founders and Co-CEOs (Rose Goslinga and Thomas Njeru)

Therefore, the new financing will scale up operations in its existing 13 markets across Africa, where it has insured over 4.3 million farmers. They include Senegal, Ghana, Mali, Nigeria, Ethiopia, Madagascar, Tanzania, Kenya, Rwanda, Uganda, Zambia, Malawi and Mozambique. Likewise, the Kenyan startup hopes to propel its expansion for smallholder farmers in Asia and Latin America.

Pula is one of the few African startups disrupting the farming industry with technology. Its Series A investment attests that investors’ appetite for agritech startups is still on the rise.

A week ago, Aerobotics, a South African startup that uses artificial intelligence to help farmers protect their trees and fruits from risks, raised a Series B round of $17 million. Last month, SunCulture, a Kenyan startup that provides solar power systems, water pumps and irrigation systems for small-scale farmers, raised $14 million. 

Another startup is Apollo Agriculture which raised $6 million Series A, akin to Pula. Not only did the pair raise the same round, Apollo Agriculture and Pula both deal with providing financial resources to smallholder farmers. But while both companies might look like competitors, even to the admission of Goslinga, she argues that the startups are partners and complement each other.

As part of the new fundraise, TLcom’s senior partner Omobola Johnson will join Pula’s board. However, it was her colleague, Maurizio Caio, the firm’s managing partner, who had something to say about the round. 

“The potential for the insurance market for smallholder farmers in Africa is huge, and under the leadership of Rose and Thomas, Pula has rapidly established a strong presence throughout the continent and has several high-profile clients on their books. We are confident of Pula’s potential for growth in spite of the pandemic and look forward to partnering with them as they execute the next phase of their journey,” he said in a statement.

For the lead investor, Pula’s investment marks the culmination of its busiest run of investments having led and co-led rounds in Okra, Shara, Autochek and Ilara Health within the past year.

Christina Juhasz, CIO at Women’s World Banking, the other investor in the round, explained that the organisation cut a check for Pula “given the legions of women engaged in small-hold farming and securing the food supply for communities around the globe.”

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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The one-shot vaccine from Johnson & Johnson now has FDA support in the US

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An advisory board to the US Food and Drug Administration voted unanimously in favor of the first single-shot covid-19 vaccine, clearing the path for the health agency to authorize its immediate use as soon as tomorrow.

The one-shot vaccine, developed by Johnson & Johnson, has the additional advantage of being easy to store, because it requires nothing colder than ordinary refrigerator temperatures. It stopped 66% of mild and serious covid-19 cases in a trial carried out on three continents.

It will join a US covid arsenal that already includes authorized vaccines from Moderna and Pfizer. Those vaccines, which use messenger RNA, were significantly more effective (they stopped about 95% of cases), but they require two shots, and the doses need to be stored at ultra-cold temperatures.

Globally, a growing list of injections developed in Russia, China, India, and the United Kingdom all are starting to see wide use.

While the new J&J vaccine isn’t as effective as those made using messenger RNA technology, health officials said that shouldn’t dissuade people from getting it, since it still sharply reduces the chance of illness and death.

“To have two is fine, and having three is absolutely better,” Anthony Fauci, the country’s chief virologist, said during an interview on NBC. “It’s more choices and increases the supply. It will certainly contribute to getting control.”

In the US, there have been approximately 28 million confirmed cases of covid-19 and 500,000 deaths.

The limited supplies of the Moderna and Pfizer shots mean most Americans are still waiting to be vaccinated. About 1.4 million doses of those two vaccines were given each day last week in the US. At that pace it would take about a year to vaccinate the whole nation.

In theory, an easily stored single-shot vaccine could kick up the pace. In practice, though, supply shortages of the J&J vaccine could limit the role it plays in the US vaccination campaign. In testimony before Congress this week, Johnson & Johnson said it had only 4 million shots ready to go, a third of the initial supply promised, and would deliver only 20 million doses by the end of March.

“I wonder if the J&J vaccine is going to be a significant part of the US landscape,” says Eric Topol, a doctor at the Scripps Research Institute, who called initial supplies “paltry” given that the company received extensive government support.

The vaccine also has what Topol called a “notable dropdown in efficacy overall” compared with messenger RNA shots, although many health experts this week rushed to defend the vaccine against any suggestion it was inferior.

“Everything we’ve seen so far says these are excellent vaccines,” Ashish Jha, a health policy researcher and doctor at Brown University, wrote on Twitter, where he argued that comparing “headline efficacy” among vaccines can be misleading since “they all are essentially 100% at preventing hospitalizations [and] deaths once they’ve kicked in.”

New shot

The new one-shot vaccine, called Ad26.COV2.S, was developed by Johnson & Johnson using work from Beth Israel Deaconess Medical Center in Boston. It employs a harmless viral carrier, adenovirus 26, which can enter cells but doesn’t multiply or grow. Instead, the carrier is used to drop off gene instructions that tell a person’s cells to make the distinctive coronavirus spike protein, which in turn trains the immune system to combat the pathogen.

The New York Times published a detailed graphical explanation of how the vaccine works.

Richard Nettles, vice president of US medical affairs at Janssen, a J&J subsidiary, told Congress during testimony on February 23 that production of the vaccine is “highly complex” and said the company was working to manufacture the shots at eight locations, including a US site in Maryland.

The manufacturing is complicated because the vaccine virus is grown in living cells before it is purified and bottled. Making a batch of virus takes two months, which is why there is no way to immediately increase supplies if timelines are missed.

Indeed, the biggest disappointment around the new vaccine is a supply shortfall caused by manufacturing problems. Jeffrey Zients, coordinator of President Biden’s covid-19 task force, said during a White House press conference on Wednesday, February 24, that the new administration had only “learned that J&J was behind on manufacturing” when it took office five week ago.

“It was disappointing when we arrived,” he said. “The initial production ramp … was slower than we’d like.”

Pretty effective

In late January, the company announced results from a 45,000-person study it carried out in the US, South Africa, and South America, in which people got either the vaccine or a placebo.

Overall, the vaccine was 66% effective in stopping covid-19, and somewhat better at stopping severe disease. In the trial, for instance, seven people died of covid-19, but all of these were in the placebo arm. Also, its effects increased with time—after a month, no one in the vaccine arm had to go to the hospital for covid-19.

Johnson & Johnson claims it will not be making a profit from the vaccine, which will also be sold outside the US. Instead, Nettles said, the vaccine will be sold at a single “not-for-profit” price to all countries “for emergency pandemic use.”

Nettles didn’t say what that price would be, but the US agreed last year to pay the company about $1 billion for a guarantee of 100 million doses and has given the company a similar amount of development funding, making it one of the major investments of Operation Warp Speed, as the vaccine effort was known during the Trump administration.

Shortage to surplus

At least for the moment, vaccine supply remains a limiting factor in the US inoculation campaign, which has seen 70 million doses administered since it began in December, according to Bloomberg. “I don’t see an excess of vaccine for a while,” says Peter Hotez, a virologist and vaccine developer at the Baylor College of Medicine.

All told, the US will have received enough shots to fully vaccinate 130 million Americans by the end of March, when projected supplies from Pfizer, Moderna, and J&J are tallied together.

Still, vaccine shortages could turn to excess before summer, creating a situation in which it’s no longer vaccines that are in short supply, but people willing or eligible to receive them.

That is because in the US, children under 18 make up about a quarter of the population but aren’t yet allowed to receive the shots. As well, about 30% of American adults claim they won’t get a covid-19 vaccine at all. Children and vaccine doubters together make up half the population.

By August, the three companies say, they will deliver the US enough vaccines for 400 million people, or more than the country’s population. That does not account for a fourth vaccine, manufactured by Novavax, that may also win US authorization.

“By the summer we will be in good shape. The question is how we navigate this space between now and June,” says Hotez.

Growing arsenal

The Johnson & Johnson shot joins a growing worldwide list of approved vaccines that includes the two messenger RNA vaccines, injections from AstraZeneca and Chinese manufacturers, and Russia’s “Sputnik” vaccine, all of which are in use outside the US.

People who get any of the vaccines will, on average, see their chance of dying from covid-19 plummet to near zero. That is down from an overall death rate of around 1.7% of diagnosed cases in the US—and a risk several times higher in elderly people.

The J&J shot has fewer side effects than the mRNA vaccines and has also proved effective against a highly transmissible South African variant of the virus that has accumulated numerous mutations.

The South Africa variant has alarmed researchers because it clearly decreases the effectiveness of some vaccines. A study in South Africa by AstraZeneca found its vaccine didn’t offer protection against the variant at all, causing officials to scrap a plan to distribute the shot there.

According to health minister Zweli Mkhize, South Africa is instead pivoting to the J&J vaccine, with a plan to vaccinate 80,000 health-care workers in the next two weeks.

This week, Moderna also said it would develop a shot tailored against the South African variant, and Pfizer indicated it was also preparing to counter new strains as they arise. Another strategy being contemplated to fend off variants is to give people extra booster doses of the current vaccines.

Some experts in the US continue to urge the government to adopt faster-paced vaccine schemes, like delaying second doses of the messenger RNA shots or using half doses, arguing that the more people who have “good enough” protection, the sooner the pandemic will end.

So far, though, it’s not clear what agency or official would be ready, or even legally authorized, to make that call.

“We are all scratching our heads about who could make that decision,” says Hotez. “And it all depends on how much urgency you feel. The big picture is if you know the numbers are going down, and feel they are going to stay down due to seasonality, then you have some breathing space. But if you are worried about variants, then you have a problem, and you want to vaccinate ahead of schedule.”

On NBC, Fauci said people shouldn’t wait for the best vaccine but take what’s offered. “Even one that may be somewhat less effective is still effective against severe disease, as we have seen with the J&J vaccine,” he said. “Get vaccinated when the vaccine is available to you.”

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Daily Crunch: Facebook launches rap app

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Facebook unveils another experimental app, Atlassian acquires a data visualization startup and Newsela becomes a unicorn. This is your Daily Crunch for February 26, 2021.

The big story: Facebook launches rap app

The new BARS app was created by NPE Team (Facebook’s internal R&D group), allowing rappers to select from professionally created beats, and then create and share their own raps and videos. It includes autotune and will even suggest rhymes as you’re writing the lyrics.

This marks NPE Team’s second musical effort — the first was the music video app Collab. (It could also be seen as another attempt by Facebook to launch a TikTok competitor.) BARS is available in the iOS App Store in the U.S., with Facebook gradually admitting users off a waitlist.

The tech giants

Atlassian is acquiring Chartio to bring data visualization to the platform — Atlassian sees Chartio as a way to really take advantage of the data locked inside its products.

Yelp puts trust and safety in the spotlight — Yelp released its very first trust and safety report this week, with the goal of explaining the work that it does to crack down on fraudulent and otherwise inaccurate or unhelpful content.

Startups, funding and venture capital

Newsela, the replacement for textbooks, raises $100M and becomes a unicorn —  If Newsela is doing its job right, its third-party content can replace textbooks within a classroom altogether, while helping teachers provide fresh, personalized material.

Tim Hortons marks two years in China with Tencent investment — The Canadian coffee and doughnut giant has raised a new round of funding for its Chinese venture.

Sources: Lightspeed is close to hiring a new London-based partner to put down further roots in Europe — According to multiple sources, Paul Murphy is being hired away from Northzone.

Advice and analysis from Extra Crunch

In freemium marketing, product analytics are the difference between conversion and confusion — Considering that most freemium providers see fewer than 5% of free users move to paid plans, even a slight improvement in conversion can translate to significant revenue gains.

As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings — With buy-now-pay-later options, consumers turn a one-time purchase into a limited string of regular payments.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Jamaica’s JamCOVID pulled offline after third security lapse exposed travelers’ data — JamCOVID was set up last year to help the government process travelers arriving on the island.

AT&T is turning DirecTV into a standalone company — AT&T says it will own 70% of the new company, while private equity firm TPG will own 30%.

How to ace the 1-hour, and ever-elusive, pitch presentation at TC Early Stage — Norwest’s Lisa Wu has a message for founders: Think like a VC during your pitch presentation.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Salesforce delivers, Wall Street doubts as stock falls 6.3% post-earnings

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Wall Street investors can be fickle beasts. Take Salesforce as an example. The CRM giant announced a $5.82 billion quarter when it reported earnings yesterday. Revenue was up 20% year over year. The company also reported $21.25 billion in total revenue for the just closed FY2021, up 24% YoY. If that wasn’t enough, it raised its FY2022 guidance (its upcoming fiscal year) to over $25 billion. What’s not to like?

You want higher quarterly revenue, Salesforce gave you higher revenue. You want high growth and solid projected revenue — check and check. In fact, it’s hard to find anything to complain about in the report. The company is performing and growing at a rate that is remarkable for an organization of its size and maturity — and it is expected to continue to perform and grow.

How did Wall Street react to this stellar report? It punished the stock with the price down over 6%, a pretty dismal day considering the company brought home such a promising report card.

2/6/21 Salesforce stock report with stock down 6.31%

Image Credits: Google

So what is going on here? It could be that investors simply don’t believe the growth is sustainable or that the company overpaid when it bought Slack at the end of last year for over $27 billion. It could be it’s just people overreacting to a cooling market this week. But if investors are looking for a high growth company, Salesforce is delivering that

While Slack was expensive, it reported revenue over $250 million yesterday, pushing it over the $1 billion run rate with more than 100 customers paying over $1 million in ARR. Those numbers will eventually get added to Salesforce’s bottom line.

Canaccord Genuity analyst David Hynes Jr wrote that he was baffled by investor’s reaction to this report. Like me, he saw a lot of positives. Yet Wall Street decided to focus on the negative, and see “the glass half empty” as he put it in his note to investors.

“The stock is clearly in the show-me camp, which means it’s likely to take another couple of quarters for investors to buy into the idea that fundamentals are actually quite solid here, and that Slack was opportunistic (and yes, pricey), but not an attempt to mask suddenly deteriorating growth,” Hynes wrote.

During the call with analysts yesterday, Brad Zelnick from Credit Suisse asked how well the company could accelerate out of the pandemic-induced economic malaise, and Gavin Patterson, Salesforce’s president and chief revenue officers says the company is ready whenever the world moves past the pandemic.

“And let me reassure you, we are building the capability in terms of the sales force. You’d be delighted to hear that we’re investing significantly in terms of our direct sales force to take advantage of that demand. And I’m very confident we’ll be able to meet it. So I think you’re hearing today a message from us all that the business is strong, the pipeline is strong and we’ve got confidence going into the year,”Patterson said.

While Salesforce execs were clearly pumped up yesterday with good reason, there’s still doubt out in investor land that manifested itself in the stock starting down and staying down all day. It will be as Hynes suggested up to Salesforce to keep proving them wrong. As long as they keep producing quarters like the one they had this week, they should be just fine, regardless of what the naysayers on Wall Street may be thinking today.

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