Hepstar, a Cape Town startup whose technology helps to distribute insurance ancillary products, has received a $2 million equity investment from Amadeus Capital Partners.
Founded in 2013, Hepstar helps design travel insurance and sells the ancillary products via its platform to third-party websites.
Team:
Founder: Stephan Ekbergh, CEO, who previously founded online travel agency Travelstart, which earlier this month received a $40 million investment round, led by Amadeus Capital Partners (not related to travel tech giant Amadeus) and MTN Group.
Number of full-time staff members: 16, mostly based in Cape Town.
Funding arrangements?
It has been financed by the founder up until now. Funding gives minority stake to the investors.
Amadeus Capital Partners provided the investment out of its "Digital Prosperity Fund", backed by the MTN Group. This fund assists growth companies to develop online and mobile applications in emerging markets such as Africa, the Middle East, Asia and Latin America.
Revenue model?
Transaction fee based on sales value.
Why do you think the pain point you’re solving is painful enough that customers are willing to pay for your solution?
Travel insurance is the smallest category of ancillaries and it is cumbersome to address and implement properly on a global basis.
Hepstar provides a plug-and-play solution which greatly improves attachment rates. We can help our partners make up to 30% of their net revenues from insurance ancillaries.
External validation?
- 300,000 transactions processed in 2015.
- Partner Deals: IATI, South African Airways, CarTrawler, Clickbus, Travelstart, Amadeus IT Group.
- Global partnerships with Insurance Companies: Mapfre Assistancia, Orient Sigorta, Regent, Orient Takaful, Al Sagr, Cornerstone, Jubliee, GA Insurance, Champions Insurance, Group Activa, Garantia Seguros, and Phoenix.
- Developed many clients in Africa, Europe, the GCC region, and Australia.
One-minute video pitchStephen Booysen, CTO, has made a one-minute video pitch for Hepstar. This is a new feature for Tnooz's TLabs/Startup Pitch series, and his is a great model:
Tnooz view:
Hepstar benefits from having an experienced management team that's shown good instincts so far when it comes to rationalizing customer segments and using strategic partnerships for growth.
A mild concern is the company's race to scale, given its plan to grow 150% this year partly by expanding into markets like South America, Russia, and Asia. The expansion will need to be managed carefully with robust processes, especially around the regulations affecting its products.