Episode 18 - A Portfolio of Many Colors with Ted Pantone
Ted Pantone has done everything from water initiatives to impact investing. He even opened the first Pizza Hut franchise in Uganda.
Today, the American expat is the CEO of Turaco, a microinsurance company that seeks to free people from the fear of financial shock. The company has headquarters in Kenya with a presence in Uganda and Nigeria as well.
Ted joins the show to talk about his diverse career and to speak about the power of perseverance and faith in the midst of change.
Episode Transcript
Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it.
Jacktone: Welcome back to the Faith Driven Entrepreneur Africa podcast, where we spotlight the voices of entrepreneurs and innovators shaping the marketplace across the continent. This week we are featuring Ted Pantone, Ted Pantone. It's hard to categorize an American expert. Ted has work and lived in various African countries for nearly two decades, studying a handful of companies along the way. He's helped spearhead water initiatives in West Kenya, led a team of impact investors in Uganda and opened the first Pizza Hut franchise there, too. His latest venture to Turaco is a micro-insurance company that seeks to free people from the fear of financial shock. Though based in Kenya, the company has a presence in Uganda and Nigeria as well and plans on expanding further over the next 25 years. Ted joins the show to talk about the importance of creating long term sustainable change in the communities God calls you.
Ndidi Nwuneli: Welcome to the Faith Driven Entrepreneur Africa Podcast. We're so delighted to have a special guest with us today, Ted Panton, and of course, my co-host, Henry, who is no stranger to this community, the visionary behind the podcast. Welcome, Henry.
Henry Kaestner: Ndidi. It's great to be with you. I'm really looking forward to today. Ted is a great guy, a good friend, and I'm excited to hear the story of what God has done through Turaco.
Ndidi Nwuneli: Fantastic, Ted. When I was looking at your bio, just to me, so just lots of experiences in different sectors. Just give us a flyover of your experience on the continent.
Ted Pantone: Sure. So great to be with you guys, Nidid, Henry, thanks so much. I'm a huge fan of the podcast, so I'm really excited to get to share a little bit of my story with you all. So I grew up in California, American, went to university at Kings College in New York, which is kind of really where I found my faith and had a bit of a call while I was there to serve the poor. Sure. Remember the moment I was watching a video of Invisible Children, a production that they did about northern Uganda, and I was studying economics at the time, and I remember this moment where I was like, Why are all these people unemployed? This is a terrible situation. Someone's got to do something about it. So it's a bit of a strange call to do missions, but that's kind of what the Lord put on my heart. And yeah, I got advice from a friend at the time that I should learn how to do something before I try and help people. So I took a job with a company in Ohio back in corporation. Really awesome group of people learn how to run a business, being mentored by them and then move to East Africa. So I started in pure charity work working with the Gates Foundation Project and in rural western Kenya, serving farmers with water, sanitation work. Loved being there. Kind of thought, okay, I'm going to do this for a year and go back for an MBA and then figure out what's next. And kind of one year led to 2 led to 3 led to 5 led to 10 and I'm still over here doing things and building. Haven't gone back for that MBA yet. So yeah, I've done, as you said, a lot of different projects changed around a lot and I have really enjoyed my time in this place that is not my home, but it's really become a home for me and my family.
Henry Kaestner: That's super encouraging. And so it sounds like you've got this kind of eclectic background and all coming together. By the way, I didn't get my MBA either. I think it's great for people who do get it, but it sounds like you've lived it out. You've lived it out, and there's some classes you could actually teach on that. Tell us about this kind of wide range. And now that you've been in Africa for almost two decades, you're in this really unique spot where you have had your feet in kind of both cultures. And since you've been in Africa, you've seen lots of different perspectives. One of the things I'd really like to get out of this particular program today is something I know is really a big passion for Ndidi is just changing the narrative of Africa. So you have this perspective probably had an idea about what you thought Africa would be before you got on a plane, and yet you've seen something that's probably a lot more nuanced and a lot different than what you would imagine. What is that and what have you learned from this range of experiences?
Ted Pantone: Great question, Henry. I mean, to start with, Africa is the most entrepreneurial place in the world. Everyone here has a business. Everyone has a side hustle. People are building things left, right and center. And it's just like I grew up in a culture in the States where the general mantra is, you go to college and you get a job and you work and maybe you get another job and eventually you retire. And that's not an option for most people here as the economy is still under development, still being built. So people are just incredibly entrepreneurial. People are finding ways to build things in dramatic ways that I've learned a lot from. Right. I came over here thinking I was going to do a bunch of good and like I started off actually doing a short term missions trip to Uganda where I came to do the thing where you go around to orphanages and hold babies and try and help. And I hated it. I was like, this is clearly not doing anything positive for people. And at the same time, I was like, these people have deeper faith than me, the people that we were there to serve. So I really changed my narrative when I came full time of one of, okay, let's try and be productive and do good work, but also not come in here thinking that I've got something to give that people here can't figure out themselves. It's more just this is the place that we wanted to be and got the chance to come to live here and build things. I think one of the biggest narrative shifts that I've seen in the last few years is just this massive move into technology businesses. I live in Nairobi, Kenya, right. So I'm talking to you right now from Nairobi. And this is the silicon Savannah, right? There are tech founders and tech businesses as far as the eye can see of people that are using technology to solve really interesting problems and build the unicorns. We've had five unicorns on the continent in the last six months. I think this moment in time, your community over there in Silicon Valley is starting to open their eyes to the opportunity here. And I'm just amazed by the types of businesses founders have been able to build to solve the problems here.
Ndidi Nwuneli: Ted, you've moved from establishing the first Pizza Hut in Uganda to insurance today and widely different industries. First of all, how has God led your career path and what pivots have kind of led to these transformations in your career path? And what is the messaging through it that you've heard from the Holy Spirit?
Ted Pantone: I think there's only two constants in life. One is God's love for us, and the other is change. I think the world is always changing, and I think that's a good thing. I mean, I come from a culture where the goal and the aspiration is comfort and security. You want to get wealthy and then be stable and be comfortable. I found that the richest moments and times in my life have come when I've been uncomfortable and pivoting to something new and trying to change and entering a new season. And now I think it's something that I seek now. I enjoy those levels of kind of going into a new thing that I don't totally understand and figuring it out and building a team. I love to build, I love to problem solve. So these are parts of just who I am. But I think for all of us, and particularly for entrepreneurs, stepping out of comfort and into change, into new seasons of growth is about just the richest times that we can experience in life.
Henry Kaestner: So I'm fascinated by this Pizza Hut thing because I think, oh, my goodness, that sounds kind of stereotypical cliche. You get a white California coming out and I'm going to bring Africa pizza, right? My sense is that if you've been there for as long as you have, that there are, especially now that you're at Turaco I mean, you're involved in micro-insurance at major scale and something completely different than pizza. But let's start off with that. What have you learned about you come in American cuisine and yet I bet you've experienced all sorts of different things about African culture to include the food that has given you a much more broad, diverse view of what American culture has to contribute to the world. And so let's before we get to Micro-Insurance, what food from Africa would you come back to California? Encourage somebody from California to start a franchise in that represents African cuisine?
Ted Pantone: Wow. There's several I think the best food on the continent is is Nigerian. It's just like crazy.
Henry Kaestner: Ndidi.
Ndidi Nwuneli: I am clapping. I am clapping Guess reasons.
Ted Pantone: It's like spicier than you've ever experienced, but like just amazing flavors. And I think it would knock the socks off of a lot of hoity toity restaurateurs in New York, and they got to have some suya and enjoy a very different type of experience. So yeah, I would love to see there's actually a big movement in food in the States to try and integrate Ethiopian and Egyptian and Tunisian and Nigerian cuisines because there's just some amazing food out there, even Swahili food here on the coast. So I love food. It made my Italian grandfather turn over in his grave when I opened a Pizza Hut in Uganda, because it's not necessarily the type of food that my ancestors would have been proud of, but it was a great business and in a lot of ways it brought a lot of joy to people that we got to bring pizza to. So I love getting to build it. And there are very few places on the planet where you can open a Pizza Hut franchise and be a disruptive business. In the Wild West of the places where we get to live is one of those. So yeah, it was a lot of fun.
Ndidi Nwuneli: Ted You might not know that I'm working on changing narratives, using food as a way to build bridges. So we have one converted fan. So that's awesome. I served on a board of an insurance company in Nigeria and it's one of the most difficult businesses anywhere in the world. But I would say on the continent of Africa extremely difficult. So what was it about the sector? What did God show you about this sector and why insurance and micro insurance, for that matter?
Ted Pantone: Yeah, thanks Ndidi, insurance is fundamentally an industry in need of redemption, right? It is just broken. The core product delivery of an insurance company is claims, and the way that an insurance company talks about claims like claims paid is they call it losses. So the thing that they're there to do, which is payout claims, when people have bad situations, that's their product delivery and they call it a loss. Right. So even just psychologically as an industry coming from the outside, I'm like, this thing is broken. Nobody trusts insurance, particularly where I come from. It's just like kind of not an industry that people love, right? Sorry for all my insurance friends in the States and in Europe, but you guys know, people don't like you. The the opportunity in a place like Kenya, Uganda, Nigeria, where we operate, that 90 plus percent of people don't have an insurance policy or never have had one to come in and just change that narrative and come in to an industry and rebuild the way business is done so that people trust insurance intrinsically. People are excited about the opportunity to de-risk their lives was just super compelling to me and I felt like, yeah, just God put it on my heart. Like day two, after I had heard about my car insurance, I woke up. I want to insure a billion people. Let's go. Let's figure out how to do this. I want to figure out how to make it so that people don't have to do really bad things when financial shocks happen to them. Right. They don't have to sell assets for pennies on the dollar. They don't have to move back to the village and farm if they get in a financial crisis. Right. They should have the same opportunities for safety nets that I had growing up. Even though they're in a place that doesn't have quite as much infrastructure. So that's what got me excited about it. This thing needs to get fixed. That's who I am. I like to fix things. And from a just like sheer scale and opportunity standpoint, there are few opportunities where there's such a green field to grow. An industry that's generally pretty known. Needs to be tweaked a little bit to work in a local context and to change those narratives. But yeah, it just was really exciting to me when I first started hearing about it, and God's continued to kind of build on those ideas and narratives for me. Since then, if you ask anybody at Turaco what business we're in, they'll tell you that we're in the claims bank business, right? We're in the business of coming alongside people in their times of greatest need, which I don't think there's much that would be closer to the heart of Christ than that.
Henry Kaestner: That's a beautiful thing. I know so little about insurance. I was just about to ask you and just like, how do you change the narrative if indeed most businesses are focused on increasing their revenue and decreasing their costs? How do you change that? And so I think you just hinted at it a bit there by culturally were in the claims pain business but expand on it because that's so counter-cultural. I don't know of another business the focus is so much on let's increase the expense line. And just how do you talk about that with your employees, with your customers and then also your investors?
Ted Pantone: I grew up in the kind of immediate post-Enron world of business in the states where like stakeholder value was the new cool thing to talk about. So I had that as a base foundation thinking, okay, if you're going to start an industry from scratch with insurance in Africa, which that's not actually true, there's plenty of insurance companies, but in terms of expanding the market into the mass population and you want to have a long term relationship with people and be the brand that people associate with trust and have a multi-generational relationship. You have to do that by having a really good service delivery. So the only way to have good service delivery in an insurance business is to pay claims and to pay them well. And we're still profitable from an economic standpoint and trying to be profitable as a business as well. But every time I talk to my investors, every time I talk to stakeholders, the partners that we sell through, the reinsurance partners that we work with, we have the same narrative of we're in the business of paying claims, right? We're trying to make sure that everybody makes money off of this deal, but we're not trying to maximize profits to a degree that we erode the value of insurance in people's eyes. So it's kind of having that longer term view of building a business and building an industry that fortunately I've got investors that are aligned with that. So we have the ability to take that stance.
Ndidi Nwuneli: That's awesome. And as you've grown this business, what are the major challenges you've had to overcome? We've talked about trust in the insurance industry, obviously risk minimizing strategies. But I'm just curious, what have you seen as the obstacles that you've had to overcome? And how are you shaping the industry behavior through your work? How you serving as a catalyst?
Ted Pantone: Yeah, many obstacles. All the standard ones, right? It's hard to build a business. It's hard to find the right team members to work with. It's hard to find the right investors to partner with. I think some of the unique ones for what we've built are around the distribution model. So the way that we sell insurance is we partner with financial technology companies that are already doing business with end users and we add insurance as a part of their product offering, then service that insurance with them. That's enabled us to get a lot of scale really quickly. It's a new way of doing business here. So these companies have not added something like what we're doing before. So there's been a lot of learnings about how to structure those partnerships the right way, how to build our technology stack to be able to do really seamless integrations with those businesses, and then how to kind of manage that relationship over time, because we kind of have two layers of people that we're selling to or selling to the distribution partners, and then we're also selling to the end user. So there's multiple people to serve in that context. So very specific problems for us. I think the hardest thing about being an entrepreneur is just being alone. Regardless of whether you have co-founders, it's just a lonely journey of trying to overcome random challenges on random days and riding the highs and lows of everything's going amazing or everything's totally falling apart. And I've been really blessed to have a community of friends and the kind of faithful mentors. Around me to be able to help weather those storms, but it's still been really hard.
Henry Kaestner: Yeah. Tell us more about that, because I think that there's something that all of our audience can identify with. It's the major ups and the major downs. I think you said it really, really well. You know, you come home from a day at work and you feel like we've got this nailed. We got product market fit, we're scaling. If we'd only just put some more money, they're saying we're going to go ahead and grow. And then other days you're like, Oh my goodness, what am I doing again? And everything seems to be stacked against me. Tell us more about what it looks like to navigate through that. In a place like Africa, are you able to find community with others that get some of what you're doing? And clearly not perfectly, but yeah, just riff on that a little bit about what that looks like to be out there as a pioneer. I mean, you're a pioneer. You're in a new industry with fewer than 2% of people in Africa have insurance. You probably have to spend some time. I remember going to Indonesia 12 years ago and talking about starting a venture capital fund and people didn't know what venture capital was. Right. And so some amount of people you're talking to don't understand insurance and the need for it and the benefit that come from it. So you have to educate a market as well. Just talk more about the challenges.
Ted Pantone: Yeah, happy to. I think the biggest challenge is myself and all of my co-founder friends and Henry, maybe you can relate to this is just about actually managing your own energy, right? Managing whether or not you've got the strength to face the next day's challenges and how to stay encouraged and encouraging. You can't, like, share your challenges with your team all the time, right? You've got to weigh what you can give to other people and be a wise leader in that respect. You've got to figure out what you can share with your partner, with your spouse, because she's got her own. My wife, bless her as the mother of four amazing, very young children and has a lot of challenges that she has to go through in building that piece of our family empire and having to figure out what to share there. I think the things that I learned through trying to build a business during COVID and trying to communicate effectively across those different things are just being appropriately transparent, so honest with who I am and honest with what's going on in our lives. But then, as I said, kind of shaping that narrative to the audience that we're working with to make sure people are understanding the appropriate parts of the story for them to understand. And then finding some people in my life that I can be completely transparent with where brother in Christ. For me, that's been a game changer in each season of my life are the people that God has put around me to weather my storms and help me. Whether there's I think that if you don't have a close group of friends that you can lean on, I don't think there's a possibility that you can build something through the challenges that come up.
Ndidi Nwuneli: I love the fact that you've built a community and continue to build one. It's not easy being an entrepreneur, and I share your pain, your joy, and the energy required each day to wake up and keep going. So well done. And one of the follow up on the points you raised about partnerships, obviously you have a co-founder, but you also mentioned partnerships with financial service organizations. And I'm just curious, how do you pick those partners, especially in many of our context, where some of these financial services, especially tech enabled, are actually predatory lenders to the same people they're trying to help? We're seeing a lot of very mixed reviews and impacts of some of these bundled service providers. How do you manage that and how do you leverage on the spread of discernment, wisdom from God to really determine who to work with who not to work with without knowing the end in mind really?
Ted Pantone: Really interesting question. There can be really bad partners to work with in life and in business. I won't go into details, but there have been people that we've been in business with that have really treated us poorly. And I think that there's probably more stories than any entrepreneurs willing to share about times that they've been abused or taken advantage of by people that they thought were going to be partners in some way, shape or form. So for those entrepreneurs out there that are currently living through one of those relationships, bless you. It is hard. Persevere. Keep your faith. Don't return evil for evil, there is a better path. I think when we think about the partners that we want to work with, we do everything we can to find values aligned partners that are the types of businesses that we would want to be associated with. That said, we've made some mistakes in that respect, and some of the partners that we worked with have been bad actors in the places that we've operated. Generally speaking, our goal is to get a lot of people insured, right? Our goals to be in the claims bank business and to grow from currently we're serving about 200,000 end users to grow to 1000000 to 10 million to 100 million to 1000000000. There are probably going to be businesses that will have to work with that. We don't totally agree with everything that they do. That doesn't scare me. I think as a business we're fine leveraging someone else's work to get more people insured. But we are trying to be wise, and I certainly pray through each of those partnership meetings before getting into it to ask Jesus to slam the door closed as quickly as possible if it's not something that we should enter into.
Ndidi Nwuneli: Thank you for your honesty. I hear you. In fact, over the last few Sundays, our pastors have been preaching about forgiveness and healing because so many entrepreneurs feel your pain. I have another tougher question, because in this ecosystem, there's often a backlash around foreign funders having access to funding that locals can't get. In fact, in Kenya, I'd said that of the ten startups that tried to get funding, only two Africans get funding, eight non-Africans get funding, and we see that also in senior management positions, etc.. So how do you counter that through your work? How do you face up to that? How would you deal with that question? Because I'm sure it comes up quite a bit. And how are you also trying to change the paradigm through your work?
Ted Pantone: It's a tough question, I guess, to start with. I am very privileged and I'm very aware of my privilege. Right. So I'm a I'm a white guy from California who has friends that have very deep pockets. Right. So that is just a fact. And the investment that I've made, many of the investors that have come into our business, especially early, early investors, were much more comfortable working with me because I'm from the States than if I had been someone that was not from their home culture. So that's just a fact. I accept it and realize it and I am not apologetic over it as much as I'm trying to be aware of it and make sure that we're creating new narratives for the continent. I mean, the investor, like I've been privileged to actually sit on the other side of the table and invest money. And almost everyone that I've gotten to invest in has been an African leader building something that is incredible that I love to to support and get behind. And that's certainly the vision that I have for us as we continue to be successful, is to continue to come alongside amazing African leaders. I mean, it's funny, the conversation that you just sparked in Kenya is very different in Nigeria, right? In Nigeria, like, man, it's harder to be from the states than to be a Nigerian. So I think it's very contextual based on where you happen to be, but that's certainly our approach as a family to that problem.
Ndidi Nwuneli: Thank you and thank you for believing in African founders and also supporting them. I've been looking at your website and seeing the diversity and that gives me a lot of hope. And I think you can be a beacon of hope through the way you run your business and how you empower the locals that work alongside you. So thank you for doing that.
Ted Pantone: Yeah, I mean, it's almost like not empowering locals. It's more like certainly for our team, our leadership team, which is almost entirely African, they're better at managing Africans than any American is ever going to be than I'm ever going to be. Right. They understand the context and the needs of their team members better than I do. So, yeah, it's a practical decision to manage the team that way and build the team that way.
Henry Kaestner: Ted, on that note, I want to ask another hard question from a different angle too, and that is that are you finding as you get out there and you make some investments in some of these African entrepreneurs, are you finding that local African investors are starting to invest as well? In other words, I know that a lot of times it'll be somebody might feel that much more encouraged to place investment capital when people. From that city, from that culture. Look at an entrepreneur and say that's the type of person we know. The church that they've been in, we know the education they've had. We know the problem they're trying to solve in the marketplace. And we're going to come alongside them, too. Are you finding that there's local capital that's coming along in these deals alongside you and you find that trending positively or is that kind of stagnant? And it's difficult to find folks that have been able to make wealth in Africa that are African investing in this next generation.
Ted Pantone: I think it's absolutely happening. There's more and more investment. Yeah. From Kenyan or Nigerian or Ugandan business people into businesses particularly. I think we're talking about technology companies movement into technology, because other businesses have been built by Africans like these are Kenyans run the Kenyan economy and they've built amazing businesses here, multi-billion dollar businesses. But looking at investing in technology startups, I think there's definitely a movement of capital from our markets into businesses in our markets. And there's a preference actually for that capital because, one, people don't need to wake up or like work late into the evening to have a phone call early in the morning with San Francisco. And people just get it here. You don't need to explain the fact that 80% of Kenyans use mobile money. Right. Use a version of Apple Pay dramatically more than in the US or in Europe. Right. You don't need to explain that to a local investor if you're saying we're going to use this piece of technology to sell our products, someone here just gets it intrinsically. So I think there's a growing movement of local capital investing in local businesses, for sure.
Ndidi Nwuneli: Awesome. You know, as I was reflecting on this work you are doing insurance, I was thinking about, you know, some of the biblical principles, even around social protection and taking care of the poor. What biblical principles underpin your work in insurance? And have you found any of these Bible verses or sections in the Bible that you feel are written specifically for you for such a time like this?
Ted Pantone: Yeah. I mean, there are so many references to loving and serving the poor, and it's very much like the heart of Christ. So it took almost no translation for me when comparing this business to Pizza Hut. Pizza Hut took a lot of internal contemplation for me to be like, okay, this is something that God wants to see in the world. Insurance is the core product that we're delivering is coming alongside people in their times of greatest need, right? It's serving orphans and widows. It's making it so that people have the opportunity to grow and invest and build things in a way that they hadn't before when they had to, like, manage risk on their own. Right. So yeah, I think it's very much who and what Jesus wants to see in the world. The only thing to add to that is there's a cultural dynamic, broadly speaking, in the continent, certainly in Uganda, Kenya, Nigeria, this idea of kind of communalism, of resources, where if someone in our community passes away, we all come together and share our resources to be able to help the family that's lost someone that I think is absolutely beautiful and I wish from the core of my being was more of the culture of America. But no, in America, like money is something else. We don't talk about money, right? I think that's a beautiful part of Africa. So when we design our insurance products, we're trying to design them in such a way that comes alongside that cultural kind of harambee collectivism element, not replacing it in any way. Because I want to see more of that in the world, not less.
Ndidi Nwuneli: That nuances so important. And I'm glad you understand that I have four funerals in the month of April that I'm contributing to. And, you know, funeral insurance is not a thing yet in Nigeria because we know people will come through for you. You never have to bear the burden on your own.
Ted Pantone: It's not yet a thing Ndidi where we sold our first hundred funeral insurance policies in Nigeria in the last couple of weeks. So we're going to come back now, figure out how to change that narrative.
Ndidi Nwuneli: Amazing innovation is amazing. Well done. I'll be looking to buy that for a few people, so please send it my way.
Ted Pantone: Will do, will do.
Henry Kaestner: Ted, you saw so many clients, and I'm wondering if you ever get a chance to actually interact with some of these folks that had never been insured before but end up being the recipients of some of these claims that you pay out? Do you ever get a chance to be encouraged like that? Are there any stories that jump out?
Ted Pantone: Yeah. I mean, that's that's the most fun part of our job is when we get to go and hang out with somebody who's had something bad happen in their life but not had to have the kind of dramatic consequences that they would have had if they didn't have our products. So, yeah, I mean, I think about Charles, who we've got his story on our website. He was kind of tying something on his motorcycle taxi and something broke and smacked into his eye and he was out of work for weeks and he was the only way that his family was making money. They would have been in a really bad place, basically having 3 to 4 weeks of no income and medical bills to pay for him having to go see the doctor. And yeah, he got our insurance products through a partnership with a company called Safe Border, which is a kind of uber of motorcycle taxis across the continent and was able to not be in a bad financial spot. Right. It was still a bad situation. And there's a cool thing about being a Christian and being able to mourn with those mourn who come alongside people. In those moments, I feel like God is the veil between our world and eternity is. Then in those moments and I think there's a cool chance to get to know who Jesus is in new ways. But at the same time, it's also just really fun to be able to see people appreciate what we're doing in such dramatic ways.
Ndidi Nwuneli: Now your website basically says two days turnaround time for claims payments. That's pretty remarkable. I don't think anyone has achieved that in the U.S. either. How are you able to achieve that in some of these environments?
Ted Pantone: I mean, you have to right. So this is the first principles thing, like Charles had medical bills to pay and had no income and had to take out a loan to be able to like feed his family at 2% a day interest rate. We had to get him the money in two days. If he didn't get that money in two days, he would have been buried if we had been like a traditional insurance company and taken two months to repay him. So first principles standpoint, that's how you have to design it. So because technology is where it is and we can use WhatsApp to communicate and collect documentation and we can run it through an algorithm. Let us know if we think the claim is valid for payments, or we can disburse money via mobile money instantaneously to his account. Because we've been able to build that technology, we can do things really fast. Africa has really leapfrogged the rest of the world and some of these kind of core businesses and core technologies. No one's ever going to have a landline phone here. People don't need bank accounts because they've got mobile money wallets. And I don't think people need insurance agents or an old school insurance system because they have companies like Teraco to work with.
Henry Kaestner: So Ted from a Western investor perspective, which is very black and white and I just I know probably 3% as much as I need to know about Africa and the way the culture works, etc.. So forgive me for the naivete behind asking this question, but as an investor, I want to ask you a question that some of our audience is likely thinking, which is how do you see insurance fraud? Is now there's this new thing like, oh my goodness, I just submit a claim and I can get it in two days. Are you finding insurance fraud being different in trends than you would have in other cultures where insurance is that much more established or not? Just help us to understand what that looks like.
Ted Pantone: It's pretty similar to other markets. 95% of insurance fraud and medical on the continent comes from providers. It comes from the hospitals, which is fairly true in other markets. As far as I understand it, I'm not an insurance expert, so bear with me on that. But because I'm not an insurance expert, it's kind of a first principles problem for me. We're able as a team to go in and say, okay, we know that there's going to be a fraud problem. How do we detect fraud really easily? How do we design our products to avoid providers? Right, to avoid having any interaction with the actual medical facility. So it's kind of a most of our products are paid. Our reimbursement basis is kind of a cash and carry you clear the bill yourself and then you send us the receipts and we reimburse you. So we avoid a lot of the potential fraud from kind of the core culprit there. So yeah, it's really like being strategic around product design and then designing really robust kind of systems to be able to catch fraud when it comes. But that's been our solution to the problem.
Henry Kaestner: So I'm fascinated by this also because I've had some involvement. Again, I know maybe 3% as much as I need to know, but I'm wondering if you see this dynamic being able to play out in some other frontier and emerging markets, maybe starting in Africa and then other places where this concept of social collateral becomes so strong. So you're able to do these micro loans in different communities. And because the relationship between folks in a community is so strong and encouraged, it's a very, very high repayment rate. Do you see any of that playing out in the micro insurance world where social collateral and knowing that if somebody really isn't hurt, the community will encourage them toward, you know, honesty, or am I applying the lessons unfairly from one industry, one market, one product that don't necessarily apply here?
Ted Pantone: It's not unfairly it's just not figured out yet. So we don't have a great application of that into what we're doing yet because we don't have enough scale. Right. We're couple hundred thousand users spread out dramatically across Uganda, Kenya. So we're not isolated within one community. The only thing that we have done towards that angle, Henry, is because we're working through distribution partners. We just launched with Vision Fund, which is a microfinance bank in Uganda. So all of the Vision Fund borrowers now have a Turaco insurance policy as a part of their loan that they get. So we're working with them, leveraging their own learnings and work around social capital to try and make sure that there's a reduction in potential fraud through the business. Because if you commit fraud, then you can no longer get a loan. So it's all an incentive game from that perspective.
Ndidi Nwuneli: Really interesting Ted I have one question as we do that, wrapping it up really around how you create a new industry because that's what you're doing and some of the principles that have guided you, especially as you work with regulators, all my friends and micro-insurance, the regulators are a challenge because they don't know this new industry. So how have you kind of navigated creating a new industry and a new market? What can some listeners take away from this as they embark on their own opportunities to shape industries or create industries where nonexistent before?
Ted Pantone: Great question. I'll push back a little bit because we're not the only players in the world doing micro-insurance, right? We're not necessarily the first actors in the world to try and figure out some solutions to this problem, which I guess for other founders, if you're the first and only person doing something, it might be a sign that it's going to be really, really hard. Or maybe you should not be working on that project. That said, Airbnb came from somewhere for us. We have really good relationships with regulators. We were the most innovative insurance agent of the year in Uganda last year, kind of a prize given by the regulators. So we will lean into those. Relationships, make sure that the regulators are aligned with the way that we want to do business. And honestly, we've had really positive relationships and no one kind of prevented us from doing what we wanted to do. I think there's a lot of risk in regulation because, as you said, somebody might not understand the change that you're trying to implement. For my friends that are trying to operate in regulated industries, my general encouragement would be try and use the front door of the regulator, not the back door. Go in and form a good relationship. That's 100% the best way to operate.
Ndidi Nwuneli: And as you look to the future 5 to 10 years from now on the African continent, what are you hopeful about? What you expect to be doing and just what are your prayers and thoughts for the future of our continent?
Ted Pantone: Future of our continent. I mean, my consistent prayer for Africa is peace as regimes change and people figure out how to modernize infrastructure and modernize their economies. I mean, we have an election coming up in Kenya this year. So there's lots of prayers going into that from our family for peaceful transition. And yeah, just new and growing opportunities. I mean, I am so bullish on this continent. Like, there's no way in my head that Africa is not 100 X what it is today in ten years time. There's lots of particularly in the technology space and what people are able to kind of leapfrog and do with technology companies. So, yeah, my prayer for us as a team and as a family is that we can be faithful to the opportunity that God's given us and maintain the convictions that we have about being in the claims, paying business, about doing business the right way. The markets that we get to operate and yeah, just lean in to the challenges and the opportunities that come our way.
Henry Kaestner: Ted, you answered the question before about what you're hearing from God in his word and the inspiration that you have from your faith. And so I'm not going to close this out the way we do most of our conversations, because I think you already address that and address that well, I want to thank you for being on. We had an opportunity to talk about something we've never talked about on any of our podcasts across Faith Driven Investor, Faith Driven Entrepreneurs in the West, Africa and Asia. And you hit on some things with some great lessons I'm taking away from this about being faithful and obedient and some vulnerability about the times in an entrepreneur, what they as the best of times and the worst of times. Entrepreneurship can be a lonely journey in how you lean in on your faith and just some of the challenges with, you know, the particular industry you're in and, you know, what are the partners and how do you think about the regulators? And so. Thank you. Thank you for being so transparent and vulnerable and handling a lot of the questions that our audience would ask. And I'm encouraged by our time together, and I want to close this time out by praying for you. And maybe I'll start in, Ndidi. And so we're going to do something that we haven't done before, which is Ndidi and I are going to just pray for you and we're going to send you and our audience out. Heavenly Father, I thank you for Ted. We thank you for Ted. We thank you for Teraco. We ask that you give them favor and protection and that that would, of course, extend to Ted and his family and his team. Just be with him. Give him your joy as he goes about doing your work. Thank you for his faithfulness and obedience and the time that he spent with us.
Ndidi Nwuneli: And our Father. We also thank you for all the entrepreneurs listening, especially those who are weary or tired, who often feel lonely. We ask you to renew, refresh, replenish, give them a new source of joy. Let them feel an overflow of your spirit. Give them a new bounce in their step as they take on the challenges, the opportunities that you've laid before them, and finally give them wisdom and discerning spirit to hear your voice, to be obedient and to act with courage as they take on new territories for the Kingdom of God. We bless you. We praise your name. We thank you for the faith driven investor and podcast team, and we just ask you to take all the glory through everything you've done, through the lives of everyone involved in this. Blessed be a holy name for I pray in the mighty name of Jesus. Amen.
Henry Kaestner: Amen. Amen.
