DOB Equity backs Rwanda-based digital health insurer

Eden Care, a licensed Rwanda-based digital insurer, has completed a pre-seed funding round from DOB Equity, Seedstars International, Norrsken Foundation, and Bathurst Capital.

The company aims to disrupt the inefficient provision of health insurance in East Africa, with a digital-first solution which saves consumers money by disintermediating insurance brokers.

At 0.5% of African GDP, health insurance penetration in Africa lags behind the global average of 6%. Incumbents have focused on the upper-income and large corporates pricing out the emerging young, middle-class population and SMEs that underpin the ‘Africa Rising’ narrative.

Limited user data and reliance on brokers for distribution have resulted in poor-quality, standardised products that deliver a substandard customer experience, poor clinical outcomes, and runaway insurance premium inflation.

Up to 50% of premiums paid by consumers are spent on admin, meaning lower spending on actual healthcare services. Despite that high spend on admin costs patients spend up to 2.5 hours on insurance-related wait time at the hospital, and HR managers spend 160 hours annually managing health cover for a team of 100.

Arnold Mwangi, investment professional at Nairobi-based Dutch impact investment firm DOB Equity says, “The health insurance market in East Africa is ripe for disruption that delivers consumers better value and ultimately better healthcare provision. We see Eden Care as having what it takes to deliver that increase in value and service for consumers.”

Despite decades of effort, incumbent underwriters have made little progress in reining in premium inflation or incentivising key stakeholders to produce better outcomes. Instead, health underwriters add an additional layer of complexity to an already complex healthcare system. The result is a transactional, adversarial customer experience that is out of touch with the needs of modern consumers.

Frustration after working closely with insurance companies as an investor inspired Moses Mukundi to build a solution to disrupt this $12 billion market. Mukundi founded Eden Care in early 2021 in Rwanda with a vision to scale its operations across East Africa. Alongside the institutional investors, Mukundi raised angel investments from Jay Katumba (Africa 50) and Willem Selen (Fides Kenya).

Eden Care is a digital health underwriter that is rethinking healthcare by directing the flow of data and money towards the needs of the modern African consumer. Its approach leverages technology and data science to help members seamlessly navigate the healthcare system. The resulting product delivers a superior member experience, lowers costs, invests in prevention and wellness, and optimises health outcomes.

For employers, Eden Care provides a dashboard that simplifies managing their team’s cover in a few simple clicks compared to the dozens of emails and calls it currently takes to manage an employee’s cover.

For employees, Eden Care provides an interactive app that helps them easily navigate the healthcare system, including finding the nearest pharmacy with their prescription, reducing wait times at the hospital and helping coordinate their care.

Later in the year, Eden Care plans to launch free telemedicine for its members, reducing administration costs by 50% and allowing Eden Care to deliver more value to a members’ health than incumbent brokers offer.

The National Bank of Rwanda granted Eden Care an insurance licence in August 2022 after lifting its moratorium on insurance licenses to new players. Eden Care’s licence comes at a critical time when many insurance customers are rethinking their current insurance products given the poor experience, rising cost and high levels of administration.