Rwanda-based digital health insurer completes pre-seed funding round

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, standardized 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 incentivizing 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. Moses founded Eden Care in early 2021 in Rwanda with a clear vision to scale its operations across East Africa. Alongside the institutional investors, Moses 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 optimizes health outcomes.

For employers, Eden Care provides a dashboard that simplifies managing your 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. Eden Care’s wellness-first cover helps employers attract and engage employees and keeps them happy and healthy, improving employee productivity.

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. Additionally, Eden Care offers a fun and engaging wellness program focused on fitness, nutrition, and health check-ups that rewards members for meeting their wellness goals.

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 license in August 2022 after lifting its moratorium on insurance licenses to new players. Eden Care’s license 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.

COVID-19 exposed the stark limitations of current products and heightened the need for transition to a new insurance model that builds on long-term health partnerships with an attractive wellness-first proposition.

As Africa transitions to middle-income status in the next decade, higher health spending and increased private health insurance penetration present Eden Care with a huge opportunity. Eden Care’s wellness-first model, underpinned by strong tech, data science culture and focus on customer experience, positions the business to ride this wave.

Moses Mukundi, CEO and Founder of Eden Care says “Eden Care was founded to create the kind of health insurance we wanted for ourselves – one that is affordable and doesn’t require filling 6 pages of documents at the hospital and a three-hour wait time. One where we can easily see our benefits and provides wellness tools, community, and incentives to enable us to get and stay healthy. We are excited to add aligned investors to our cap table.”

Arnold Mwangi, Investment Professional at Nairobi-based Dutch impact investment firm DOB Equity, said: “DOB is excited to partner with Eden Care to transform health insurance in Rwanda. By digitizing insurance processes and providing a wellness-first insurance cover to employers, Eden Care is making quality health insurance accessible to an underserved market – growing SMEs and businesses.”