Malaysia’s 1st digital takaful operator bags RM5 mil, will spend one more year in BNM sandbox

Homegrown insurance tech (insurtech) startup Ouch! has successfully bagged RM5 million in its recent pre-series A fundraising round from PPB Ventures.

Founded in 2018, Ouch! is a one-stop platform and app to educate users about their coverage/risks, purchase and manage digital insurance products, and make claims. The startup launched its first takaful product, Pusara Pro, last year.

On top of the fresh funds, Ouch! has also received an additional one-year extension to operate under Bank Negara Malaysia’s (BNM) Regulatory Sandbox. This will strengthen the startup’s goal to provide accessible takaful solutions.

This goal aligns with trends showing that Malaysia’s takaful market has been growing significantly. Specifically, the Malaysian Takaful Association reported a 7.55% increase in Family Takaful gross contributions from 2022 to 2023. That meant total contributions reached almost RM9 billion.  

And Ouch! is meeting that rising demand for accessible, Shariah-compliant financial protection.   

Acquiring the DITO license

The RM5 million funding will primarily go towards enhancing the startup’s technology infrastructure, expanding their market presence more rapidly, and continuing operation in the BNM sandbox.

Ouch! has been a participant of the BNM Regulatory Sandbox since 2021.

“Raising this round will also allow us more time to continue understanding and meeting customers’ needs in Malaysia in preparation for DITO,” CEO Shazy Noorazman told Vulcan Post.

He’s referring to the DITO licence from BNM, with DITO standing for Digital Insurers and Takaful Operators. According to the press release, this licence will enable Ouch! to close critical protection gaps for Malaysians, especially young families.

Developing a proprietary system

Aside from the licence, the fresh funds will also go towards developing a proprietary core system to replace third-party solutions.

“This shift will give us greater control over our platform, improve efficiency, and allow us to offer a more seamless user experience,” Shazy said. “The cost efficiencies translated from these initiatives will enable us to provide more affordable and accessible takaful protection to our customers.”

This system will include several key components:

“Our strategy involves hiring the best local talent to simplify complex problems inherent to Malaysians,” Shazy said about these goals.

“Essentially, our company is built by Malaysians for Malaysians, with the ambition to help more people understand and afford takaful protection.”

Serving the underserved

Ouch! aims to establish a secure, digital platform to meet the needs of every Malaysian, considering approximately 30 million Malaysians are still underserved in terms of financial protection. 

But how are they able to even reach this underserved community?

Shazy shared that Ouch! utilises social media and online advertising to meet them where they spend most of their time. The platform is also designed to be intuitive to ensure accessibility.

The startup also collaborates with family-centric organisations, charities, and events to increase visibility and credibility within the community.

Currently, there are over 16k existing registered users on the Ouch! platform.

Ouch! will continue to build on its growth, with plans to initiate their next fundraising round later this year to meet the minimum capital requirements for the DITO licence.

With the growing demand for takaful solutions, players aside from Ouch! will also aim to tap into the market.  

“Competition is ultimately beneficial for Malaysians, and we welcome more parties to join us in making takaful more accessible and attractive,” Shazy said.

“We believe that takaful hibah should be an essential aspect of responsible financial planning. Thus, our focus remains on providing affordable, accessible, and user-friendly takaful solutions to meet the needs of our customers.”

Featured Image Credit: Ouch!