Sehteq, a Dubai-based health insurance startup recently secured a $20m commitment to set up a reinsurance vertical, it announced in a statement. The investment is led by its anchor investor 971 Capital.
Sehteq (Arabic for ‘Your health’) was established as 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 licence, which is specifically a third party administrator (TPA) licence. 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 the UAE.
There is a limited number of licences in the market and the last TPA licence was approved in 2016. This means that new players have to buy one of the legacy businesses to enter the market. Sehteq has acquired three out of the 21 existing licences and plan to acquire two more before the end of the year to reach its target of 1m users.
971 Capital’s senior partner Saif AlJaibeji, commenting on the investment, said, “This 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.” $10m is the minimum capital required to start a reinsurance business.
Apart from the formation of the reinsurance company, Sehteq will have an additional investment of $3m to support the technology arm of Sehteq by procuring complementary solutions to enhance the existing artificial intelligence-based system of the company. At present, more than 90% of Sehteq’s back-office work is automated which improves the overall efficiency. This additional $3m will support Sehteq’s plans to acquire and build consumer centric applications to enhance the user experience of its current base of 650,000 customers.