Startup

KSA-Based Takadao Pairs Blockchain With Community To Tackle Insurance

Inc. Arabia sits down with co-founders of blockchain-powered fintech startup Takadao to talk about their community-driven financial ecosystem.

By Inc.Arabia Staff
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In a world dominated by profit-driven insurance giants, the Saudi Arabia-based decentralized finance (DeFi), Shariah-compliant insurance startup Takadao is pioneering a community-driven financial ecosystem. The community-owned fintech recently raised $1.6 mn pre-seed round, led by Silicon Valley-based investor Tim Draper, along with BIM, Core Vision Ventures and Prince Sultan bin Fahad bin Salman Al Saud.

Originally founded in Singapore and based in Saudi Arabia, Takadao was co-founded by husband and wife duo Morrad Israne and Sharene Lee. Takadao has launched three products to-date, including treasury management platform Takaturn – a pooling and saving concept that has deep roots, especially among women, in the Middle East, India and Pakistan and Africa. Takaturn, which enables users to pool their funds, earn yields, and save collectively, aligns with the community-driven model of the project. “We want to create an ecosystem that is user-centric. Community governance ensures that the project evolves based on the needs and aspirations of its users,” Lee tells us.

The company also has an NFT-based community membership and governance platform, Takalabs, and a weekly podcast, Takatalks.

The company’s insurance fund, Takasure, which is set to launch in June 2024, will offer users a community-owned insurance policy that allows policyholders to act as owners of the insurance fund, helping to ensure that their interests are aligned with the fund. Profits generated by the insurance operations will be redistributed back to the policyholders, who also serve as shareholders. The ultimate goal is to create a fairer and more transparent insurance ecosystem.

Global Aspirations

Prior to establishing Takadao in 2022, Israne and Lee team spent decades as entrepreneurs. Their previous business venture, a peer-to-peer marketplace for second-hand items, Melltoo, was acquired by UAE-based reverse logistics platform Cartlow last year. 

Israne and Lee were inspired to explore alternatives to traditional finance in the aftermath of the 2008 financial crisis, which illuminated the shortcomings of the existing financial system. When the Bitcoin white paper was released in 2009, the duo found themselves part of a broader movement of entrepreneurs seeking to revolutionize financial services using blockchain.

But it was the loss of a friend that spurred them to build Takadao. The loss highlighted the financial strain that families face after a tragedy, but also showed them the power of community in supporting families and individuals at a time of suffering. “When we went to visit the widowed wife, the house was packed with friends and family – there was nowhere for us to stand. The incident [stayed with me] and I realized how powerful communities can be,” explains Lee.

Murad and Israne tell us that their journey took an unexpected turn when they crossed paths with prominent Silicon Valley investor and proponent of blockchain technology, Tim Draper. Draper told them that the potential of a community-owned insurance platform lined up with his vision for decentralization and blockchain-driven transformation of traditional systems. Israne describes the partnership as being led by Draper, whose enthusiasm exceeded their own.

In addition to tapping into the appetite for Shariah-compliant financial services across the region, Takadao is also tapping into a growing appetite from users and investors for fintech services. A May 2023 report by McKinsey & Company estimated that revenues from fintech in the Middle East, North Africa and Pakistan (MENAP) could increase almost threefold, from $1.5 bn in 2022 to $3.5-4.5 bn in 2025. 

Blockchain as a “Gamechanger”

Crucial to the project's success is the utilization of blockchain and cryptocurrency, which, according to Lee and Israne, enable them to achieve things that they would not be able to do using traditional technologies . “We were inspired by the potential of blockchain to create a more equitable financial ecosystem. Our goal was to realign the interests of policyholders and insurers,” Lee tells Inc. Arabia.  

"Blockchain technology is a game-changer,” Israne tells us. “It allows us to establish a decentralized autonomous organization (DAO) that operates on a token-based system. This system enables policyholders to enter and exit the insurance fund seamlessly, mitigating the cost and administrative burden that traditional systems would entail." Blockchain's transparency and security aspects allow them to build trust and reliability by ensuring that funds are not mismanaged and will enable the startup to create a peer-to-peer, community-driven insurance system.

And while blockchain offers endless opportunities for transparency and security, educating users about web 3.0, blockchain and cryptocurrency wallets continues to be challenging. Israne tells us that the technology is still not accessible enough to facilitate adoption by a wider audience, explaining that improving accessibility is a “work in progress.”

*Correction: An earlier version of this article stated the name of the co-founder as Sharlene; her name is Sharene. It said that Takaturn enables users earn interest. Takaturn enables users to earn yields, as interest is prohibited in Islamic finance. It also said that Takadao acts as peer-to-peer, community-driven insurance system. Takadao is not a party to the insurance fund but rather a technology service provider. The fund is wholly owned by its members. 

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