Nimbus Direct Insurance — Capital Raise and Use of Proceeds
The ZAR 850 million capital raise across seed and Series A, the instrument structure, the detailed use of proceeds across regulatory capital, technology, acquisition and working capital, and the capital-staging plan.
Section 15 · Business Plan
Capital Raise and Use of Proceeds
The ZAR 850 million capital raise across seed and Series A, the instrument structure, the detailed use of proceeds across regulatory capital, technology, acquisition and working capital, and the capital-staging plan.
Nimbus Direct Insurance Group is seeking a total capital commitment
of ZAR 850 million in its Seed and Series A rounds to establish the
regulated entity, fund the pre-licence build phase, achieve the Pillar I
solvency capital requirement, and execute the customer acquisition plan
through Year 2. A subsequent ZAR 200 million Series B round is
contemplated in early Year 2, contingent on achievement of operational
milestones, with terms to be determined at that stage.
15.1 Funding Structure & Tranching
The capital raise is structured in two tranches aligned to regulatory
and operational milestones, reducing risk-adjusted capital intensity for
early investors and providing a natural performance gate.
| Tranche | Amount | Timing | Instrument | Pre-money | Milestone trigger |
|---|---|---|---|---|---|
| Seed (Tranche 1) | ZAR 250 m | Q1 FY26 | Ordinary equity | ZAR 0 | Signing |
| Series A (Tranche 2) | ZAR 600 m | Q3 FY26 | Ordinary equity | ZAR 350 m | Licence on-track + tech build accepted |
| Series B (Tranche 3) | ZAR 200 m | Q2 FY27 | Ordinary or preference | ZAR 1,100-1,300 m | Year-1 GWP ≥ ZAR 200 m + CR ≤ 100% |
| Tier 2 debt (optional) | ZAR 100 m | Year 3 | Subordinated 10-year | n/a | Capital efficiency optimisation |
15.2 Use of Proceeds
The ZAR 850 million Seed plus Series A capital is deployed across
five primary categories, balancing the mandatory regulatory capital
reserve with the discretionary growth investment in brand and
technology. The use-of-funds split was calibrated through a bottom-up
build that reconciles to the financial projections in Section 14.
| Category | Amount (ZAR m) | % of total | Detail |
|---|---|---|---|
| Regulatory & solvency capital | 298 | 35.0% | SCR build to 285% Year-1 coverage; ring-fenced in qualifying investments per SAM Pillar I |
| Customer acquisition & brand | 238 | 28.0% | Year 1-2 marketing investment, brand build, performance media, content production |
| Technology platform | 153 | 18.0% | Policy admin system, mobile applications, data infrastructure, integrations, cyber security |
| Operations & people | 102 | 12.0% | Senior team, claims operations, contact centre, premises and infrastructure |
| Working capital & contingency | 59 | 7.0% | Operating buffer, foreign exchange contingency, M&A and bolt-on opportunities |
| TOTAL | 850 | 100.0% |
15.2.1 Regulatory & Solvency Capital (ZAR 298 m)
Under the SAM regime, Nimbus must hold qualifying capital sufficient
to maintain SCR coverage of at least 100 percent at all times. Internal
targets are set at 175 percent (intervention threshold), with the
operating target at 200 percent and stress-test ceilings up to 285
percent at launch. The Year-1 SCR is estimated at ZAR 280-310 million
based on the planned mix of motor (primary), home (secondary), and
ancillary lines. Qualifying capital is held in a diversified investment
portfolio consistent with section 33 of the Insurance Act.
15.2.2 Customer Acquisition & Brand (ZAR 238 m)
Approximately ZAR 160 million is allocated to performance marketing
(paid search, paid social, programmatic display, comparison-site
partnerships) over Years 1-2. A further ZAR 50 million funds the brand
build (above-the-line creative, content production, sponsorship) and ZAR
28 million is reserved for content marketing, financial education,
partnerships, and earned-media activities. The investment is
front-loaded: ZAR 150 million in Year 1, ZAR 88 million in Year 2, after
which marketing transitions onto the operating P&L funded from
contribution margin.
15.2.3 Technology Platform (ZAR 153 m)
Technology investment encompasses (i) policy administration system
implementation and integration with reinsurance, claims, and finance
systems, (ii) consumer-facing mobile and web channels, (iii) the data
lake, machine-learning infrastructure, and rating engine, (iv)
third-party integrations including identity verification, credit data,
vehicle data, geocoding, and payment processing, and (v) cyber security,
observability, and compliance tooling. The platform build follows the
architecture and vendor strategy detailed in Section 8.
15.2.4 Operations & People (ZAR 102 m)
People costs include senior leadership recruitment (10-12 executives
across the C-suite plus 18-20 senior managers), the build-out of the
underwriting, claims, contact centre, and compliance teams to
approximately 120 FTEs by end of Year 1, premises (head office plus
regional claims operations centre), professional fees (legal,
regulatory, audit, actuarial certification), and IT infrastructure
beyond capitalised software.
15.2.5 Working Capital & Contingency (ZAR 59 m)
A reserve for operating contingencies, foreign exchange volatility
(Botswana market entry from Year 3), and opportunistic bolt-on
acquisitions (potential niche specialist insurer or MGA acquisition)
totalling 7 percent of the raise.
15.3 Instrument Terms (Indicative)
The Seed and Series A rounds are proposed as ordinary equity, ranking
pari passu with founder shares, with the following indicative governance
and shareholder rights provisions:
| Term | Indicative provision |
|---|---|
| Security | Ordinary shares with full voting rights, ranking pari passu |
| Lead investor right | Lead investor (≥ZAR 200m) entitled to one board seat plus one observer |
| Board composition | 8-person board: 3 independent non-executive (including chair), 2 investor-nominated, 1 founder, 2 executive (CEO, CFO) |
| Reserved matters | Customary investor reserved matters: capital raise, M&A, material strategy change, executive remuneration over threshold, related-party transactions |
| Anti-dilution | Broad-based weighted-average anti-dilution protection on down rounds, with conventional carve-outs |
| Pre-emption | Full pro-rata pre-emption rights on subsequent issuances |
| Information rights | Monthly management accounts, quarterly board pack, annual audited accounts, KPI dashboard access |
| Tag-along / drag-along | Standard tag-along; drag-along threshold 75% of issued shares |
| Liquidation preference | 1.0x non-participating preference on Seed and Series A (priority to ordinary) |
| Founder vesting | 4-year vesting with 1-year cliff for executive founders, accelerated on change of control with double-trigger |
| ESOP | 12.5% fully-diluted reserved for employee share ownership plan, pre-Series A |
| Exit cooperation | Drag-along plus cooperation covenants in IPO, trade sale, or secondary |
| Lock-up | 12-month founder lock-up post-IPO; 6-month investor lock-up |
Nimbus seeks long-term, value-aligned institutional capital. Target
investor categories include: (i) growth equity funds with insurance or
financial-services specialisation; (ii) DFI / impact-aligned capital
with a financial inclusion mandate; (iii) strategic reinsurer-affiliated
capital seeking proprietary deal flow and channel access; (iv) family
office and high-net-worth allocators with patient capital horizons; (v)
corporate venture arms of complementary financial services
groups.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of Nimbus Direct Insurance Group (Pty) Ltd.