- The investment to upgrade Sehteq to a new and innovative version of Munch Re – MedNet or Alliance – Nextcare.
Dubai: Dubai-based health insurance startup Sehteq has secured a $20m investment from anchor investor 971 Capital to set up reinsurance vertical.
The company was born at a startup incubator in Ras Al Khaimah in November 2017, and started operations in February 2018 with the acquisition of its first health insurance provider license “also known as third-party administrator TPA”.
The startup grew with 12 subsequent acquisitions and heavily invested in a solid technology platform to be the largest provider of low cost health insurance for individuals and companies in UAE.
Today, Sehteq is amongst the top three health insurance providers in the UAE and ranks ninth on the global insure-tech list, based on funding.
Sehteq, which means your health in Arabic, has acquired 3 of the 21 existing licenses and plan to acquire two more before the end of the year to reach its one million consumers target. Post Covid, three players exited the market already.
Insurance is one of the most regulated industries, and insuretech companies have to innovate and navigate through this complex system by making necessary investments in licenses and bank guarantees mandated by the Insurance Authority to operate.
Adding AI to the platform
Unfortunately, many of those startups are licensed as IT providers and this limits what they can offer.
There is a limited number of licenses and the last license for TPA was awarded in 2016. New players have to buy one of the legacy businesses.
“The investment will upgrade Sehteq in conjunction with its technology and reinsurance verticals to a new and innovative version of Munch Re – MedNet or Alliance – Nextcare,” 971 Capital’s Senior Partner Saad AlJaibeji, said.
$10 million is the minimum capital required to start a reinsurance business and the higher the initial investment goes – the more capacity the startup will have to do business.
Apart from the formation of the reinsurance company, Sehteq will have an additional investment of $3 million to support the technology arm of Sehteq by procuring complementary solutions to enhance the existing artificial intelligence-based system of the company.