WorldCover, a climate insurance provider to smallholder farmers, has raised a $6 million Series A round led by MS&AD Ventures. Y-Combinator, Western Technology Investment, and EchoVC also participated in the round.
TechCrunch reports that WorldCover’s platform uses satellite imagery, on-ground sensors, mobile phones, and data analytics to create insurance options for farmers whose crops yields are affected adversely by weather events—primarily lack of rain.
The startup currently has offices in New York, Ghana, Uganda and Kenya. According to TechCrunch, the new funding will expand its insurance offerings to more emerging market countries.
“We’re looking at India, Mexico, Brazil, Indonesia. India could be first on an 18-month timeline for a launch,” WorldCover co-founder and chief executive Chris Sheehan said.
The company has served over 30,000 farmers across its Africa operations. Smallholder farmers as those earning all or nearly all of their income from agriculture, farming on 10 to 20 acres of land, and earning around $500 to $5000, according to Sheehan.
Farmer’s connect to WorldCover by creating an account on its USSD mobile app. From there they can input their region, crop type, determine how much insurance they would like to buy and use mobile money to purchase a plan. WorldCover works with payments providers such as M-Pesa in Kenya and MTN Mobile Money in Ghana.
The service works on a sliding scale, where a customer can receive anywhere from 5x to 15x the amount of premium they have paid. If there is an adverse weather event, namely lack of rain, the farmer can file a claim via a mobile phone. WorldCover then uses its data-analytics metrics to assess it, and if approved, the farmer will receive an insurance payment via mobile-money.
Common crops farmed by WorldCover clients include maize, rice, and peanuts. It looks to add coffee, cocoa, and cashews to its coverage list.
For the moment, WorldCover only insures for events such as rainfall risk, but in the future, it will look to include other weather events, such as tropical storms, in its insurance programs and platform data-analytics.
