This is the first one of a series of “Investment Case Studies” I am going to write on the Portfolio startups of Turtle Venture Studio. In this case study, I will explore the fascinating story of how Chhaya, An affordable micro-insurance provider seeded their idea to transform the insurance industry of the most underinsured country in Southeast Asia and worked on a great vision making the life, businesses & assets of low to middle-income families of Bangladesh secured and assured with affordable micro-insurance products. I will also talk about why we, the Turtle Venture Studio have selected them for our first cohort of startups and how amazing and challenging it was till now. Join me as we delve into the details of this remarkable journey and uncover the thought process & thesis of Turtle Venture Studio’s investment in Chhaya.

Let’s start with the Problem.

The Problem: Bangladesh- The Most Underinsured Country in Southeast Asia

With a huge population of 172 Million and en route to becoming a trillion-dollar economy by 2041, Bangladesh is at huge risk of being the most underinsured country in Southeast Asia. 99% of the population of Bangladesh is uninsured with only a 0.59% penetration rate which has created a $6 Billion insurance gap because of the complicated Enrollment Process, lack of affordable insurance Products & unreliable and delayed Claim Settlements. Let’s look into some data:

• 72.68% of Healthcare Expenditure in Bangladesh is out-of-pocket
• Claim-to-Settlement Ratio is 78% far below of global average of 97%
• The insurance policy enrollment process can take up to 3 days because of the lack of digital options
• Settlement Duration can be up to 30 days

These Data points show how big and serious this problem is for Bangladesh. We understand Insurance Market in Bangladesh is mostly untapped with a Lot of Potentials to Grow for a growing middle-class & large young population

The Solution: Affordable Micro-Insurances for All

Chhaya Technologies Limited is an insurtech startup based in Bangladesh. The company’s mission is to provide affordable micro-insurances to the 99% uninsured population in Bangladesh, leveraging end-to-end digital solutions and a quicker & easier settlement process with-

• Customized product design for different segments
• Nano-sized premiums with auto-renewal facility
• Customer self-enrolment in less than 3 minutes
• End-to-end paperless service delivery
• Claims settlement within 01 week
• 24/7 customer service to assist in claims submission

The Founders: 46+ years of Cumulative Experience

1. Shaown Shahriar (CEO): 18+ Years of Experience in Product Management, GTM Planning & Loyalty Management Working with Healthtech, Insuretech & Telco.
2. Saiful Islam (COO): A seasoned business operations expert possessing 15+ years of experience in sales operations, & partnership management in Insuretech & Healthtech
3. Tahsin Abrar (CTO): A software engineer by profession, he holds 13+ years of experience in tech-enabled platform development in fintech and health-tech.

The Thesis: Why we decided to invest in Chhaya

a) Market: 99% of the population of Bangladesh is uninsured because of a lack of mandatory/universal health coverage (72.7% Out-of-Pocket Expenditure), lack of digital solutions (Avg. 20 minutes needed just for inquiry), lack of transparency (78% Claim-to-Settlement Ratio) and lack of affordable options. So, there are huge gaps in the market that were not fulfilled by traditional insurance companies.

b) Team: Founders had cumulative experience of 46+ years in insurance, telecommunication & technology sectors with diverse skill sets.

c) Tech Stack: Their tech stack was very robust which enabled the customers to enroll in just 3 minutes and settle claims in just 1 week which was far better compared to industry standards.

d) Scaleup opportunities:

1. They were on the verge of getting an Insuretech regulatory sandbox license from the Insurance Regulatory & Development Authority in Bangladesh.
2. They were in the process of onboarding their products on Bkash, the largest MFS of Bangladesh with 70 Million captive customers.
3. The Bangladesh government was planning to make motor vehicle insurance mandatory from 2024 which will give a great boost to their revenue and number of customers

The Journey: with Turtle Venture Studio

As Venture Studio works with the portfolios at the Cofounders level, we have been working with Chhaya founders in different aspects of business from Technology to Finance to Branding. This has been quite a journey and together we achieved some amazing milestones.

1. The insurance products of Chhaya got onboarded on the Bkash with an auto-renewall facility through the Bkash App which made the premium collection process digitalized and simpler.
   
2. They have got insurance tech regulatory sandbox license in Bangladesh from the Insurance Development & Regulatory Authority of Bangladesh.
   
3. With the help of our Branding team, they redesigned & rebranded their logo and whole website making the vision more clear to the audiences and making the enrollment process much cleaner, easier & user-friendly.
   
4. They are now in the process of onboarding Chhaya insurance products on Nagad (2nd largest MFS with 80 million captive customers) in Bangladesh.
   
5. They are also in talks with Grameenphone (82M subscribers) & Robi (56.4M Subscribers) to onboard the products on their app as well.
   
6. Chhaya had only health insurance products. In the last 6 months in partnership with one of the biggest general insurance companies, they launched credit shield insurance for SMEs and are in the process of launching Goods-in-transport insurance, motor insurance, and travel insurance in partnership with financial institutions, delivery & logistics companies & travel companies.
   
7. MOM growth of Chhaya is now at 41%.
   
8. In discussion with multiple investors to raise 300,000 USD at a valuation of $4 Million which gives Turtle Venture Studio an unrealized MOIC of 8X.

The Challenges: Making Founder’s Life Difficult

• Bangladesh is one of the only 3 countries in the world where motor vehicle insurance is not mandatory. It’s expected to be mandatory by this year, which will give a huge boost to Chhaya’s Revenue stream. However, the Bureaucratic process can take more time, and that delay can impact the growth trajectory of Chhaya.
  
• The population of Bangladesh is not aware of the benefits of insurance and there is also a certain amount of distrust towards insurance companies because of general perception and complicated claim settlement process that can slow down the customer acquisition growth considerably. But, That is changing rapidly with the rising middle class, and adoption of digital technologies & social media.
  
• A huge portion of Bangladesh’s population in rural and peri-urban areas have minimum access to digital products & services. They are mostly used to social media platforms but in terms of purchasing online is still a mystic thing to us. That’s why, Chhaya has adopted a brick-and-click model and going for D2D marketing that increases the cost and complications.

So, all in all, Chhaya is doing some pretty exciting stuff in the insurtech space. They’ve got a solid product, a clear vision, and a driven team. But like any startup, they’ve got some areas to work on. With the right support, they could shake things up in the insurance scene in Bangladesh