The Luxembourg based start-up IBISA, has raised seed capital of an undisclosed amount from Ankur Capital, an India-based early-stage venture capital fund focused on transformative technologies in deeptech and climate tech.
With this fresh funds, the start-up is now planning to scale its operations across the country with operations in Odisha, Karnataka, Telangana for coverage against excess rainfall, excess wind speed and drought.
The agri-insurtech startup claims to be on a mission to empower the agri value chain players with innovative weather protection insurance solutions.
IBISA was founded in 2019 and started operating in India with the DHAN Foundation to provide parametric insurance against drought coverage in Tamil Nadu.
Speaking on the investment, Ritu Verma, Partner at Ankur Capital commented: “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.”
According to reports, 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.
IBISA highlighted that it is not that there are not any insurance solutions to cater those issues, 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.
Verma added: “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.”