Kenyan insurtech company, Lami Technologies, made headlines in February of last year when it announced its intent to acquire Bluewave, another startup in the insurance industry. The acquisition was seen as a strategic move to expand Lami’s product offerings and enter new African markets. However, recent reports reveal that the deal fell through several months later, leaving the two companies to part ways.
Key Takeaway
Kenyan insurtech Lami Technologies’ planned acquisition of Bluewave, an insurance startup, has collapsed after initial agreement terms, including the acquisition cost, underwent changes. The two companies are now parting ways, with Bluewave relaunching and signing new partnerships in the micro-insurance sector.
The Initial Agreement and Changing Terms
When Lami initially made the acquisition announcement, it was revealed that a two-year “strategic partnership agreement” was in place between the two companies. This agreement aimed to set the foundation for an eventual acquisition once Lami concluded its fundraising campaign. Lami successfully raised $3.7 million in seed extension funding led by Harlem Capital.
Despite the promising start, the terms of the deal, including the acquisition cost, began to change over time. Adelaide Odhiambo, the founder of Bluewave who later joined Lami as head of partnerships, stated that these changing terms eventually led her to walk away from the deal in August of last year. Throughout this period, Bluewave had licensed its technology to Lami and had onboarded partners and employees as per their agreement. However, the acquisition plans fell through.
Lami Technologies declined to comment on the matter.
Looking Ahead for Bluewave
Odhiambo expressed disappointment that the negotiations did not result in a successful acquisition. However, Bluewave intends to move forward and has signed partnerships with aggregators, including Mobile Network Operators and banks, to distribute micro-insurance products in various countries within the East and Southern Africa regions. The two-year agreement with Lami is set to end in January 2024, and Odhiambo has chosen to honor the partnership in order to maintain a positive relationship.
