In February 2022, Kenyan insurtech Lami made headlines by announcing its acquisition of Bluewave, a fellow insurance startup. This deal promised expanded product offerings and facilitated Lami’s entry into new African markets. However, TechCrunch has uncovered the surprising truth: the acquisition never materialized.
Instead of a full acquisition, Lami and Bluewave signed a “strategic partnership agreement” lasting two years. Under this agreement, Bluewave licensed its technology to Lami and assisted with onboarding partners and employees. However, founder Adelaide Odhiambo reveals that the promised acquisition terms, including the purchase price, underwent significant changes, ultimately leading her to walk away from the deal in August 2022.
According to Odhiambo, Bluewave entered negotiations with full intentions of completing the acquisition. Unfortunately, disagreements over the commercial terms prevented the deal from seeing the light of day. Despite the failed acquisition, the two companies maintained their strategic partnership, which is now nearing its end in January 2024.
Lami and Bluewave represent two distinct players in the insurtech landscape. Lami offers an end-to-end digital insurance platform and an API that empowers businesses to create tailored insurance solutions for their customers. Bluewave, on the other hand, focuses on micro-insurance, providing access to various products through diverse channels like USSD, SMS, and chatbots.
The initial acquisition announcement envisioned integrating Bluewave’s platform into Lami’s operations, enhancing its B2B2C offerings and leveraging Bluewave’s reach to expand into new markets. While this vision did not come to fruition, both companies seem poised for continued growth and innovation.
Odhiambo explains her decision to continue the strategic partnership despite the failed acquisition. Having initiated partnerships for Bluewave, she wanted to ensure their smooth operation and avoid any disruptions. Now, with the agreement nearing its end, Bluewave is preparing to relaunch and build upon its existing foundation. Partnerships with mobile network operators and banks will enable the company to distribute micro-insurance products across various countries in East and Southern Africa.
The story of Lami and Bluewave serves as a reminder of the complexities and challenges involved in mergers and acquisitions. While the initial agreement promised substantial benefits for both parties, disagreements ultimately prevented the deal from closing. Nonetheless, both companies appear to be moving forward with renewed focus and determination, making them ones to watch in the evolving landscape of African insurtech.**