In 2008, Talal Bayaa was a fresh college graduate looking to start a career in investment banking in Dubai. Along with finding a job, he was greeted with the rudimentary tasks that many newly-minted adults face, such as opening a bank account, getting a credit card, and finding car insurance.
To research his options, he turned to what he thought was the obvious place: Google. He found nothing. “There were really no results on there,” he says.
It wasn’t just credit cards or car insurance. He couldn’t find information on nearly all financial products and services—including mortgages, loans, and health insurance. To inquire or apply, he had to call or trek to banks and insurers. It was tedious.
Bayaa sensed an opportunity. Even though the financial crash roiled the country, the U.A.E. had turned into a regional financial hub. “You have an unbelievable amount of banks and insurance companies for a population this size,” he says.
While working at a corporate finance advisory firm, he hatched in his spare time a plan with Brian Habibi, a friend from high school in Dubai. In 2013, the pair formed a startup called Bayzat to allow customers to compare rates on credit cards, loans, and insurance from institutions based in the U.A.E.
But Bayzat wasn’t the only game in town. Two other U.A.E. startups, Compareit4me and Souqalmal, were already doing the same thing, making it hard for Bayzat to differentiate itself.
New government regulations came to the rescue. Bayaa and Habibi noticed an uptick in searches for health insurance plans on their site. Consumers and businesses, it turns out, were anticipating the roll out of a new law in Dubai, which called for mandatory health coverage for all residents between 2014 and 2016.
The law requires employers or sponsors to provide basic health insurance for all their employees—typically expats who make up the bulk of Dubai’s 2.5 million residents.
To facilitate the purchase of health insurance, especially for small companies or individuals not covered through employers, such as dependents or domestic workers, the government set up an online healthcare exchange. Shoppers can compare policies from a dozen (to date) health insurers, but they can’t purchase a plan online.
In the spring of 2014, Bayaa and Habibi decided to pivot. They dumped all products, except for health and car insurance, and sales took off. Bayzat currently has about 50 companies with 50 or more employees who enrolled in plans through its platform, and 5,000 individuals who can compare policies from insurers such as Axa, Aetna, Orient Insurance, and Al Sagr National Insurance Company.
The selling point for smaller companies, says Bayaa, is that Bayzat offers online tools to HR departments to automate processes associated with managing their employees’ health benefits. It assists with tasks such as enrollment and filing claims. Bayzat also works with insurers to get customized group policies. “Once you buy a policy, it doesn’t stop there,” says Bayaa.
With its business model, Bayzat seems like a cross between eHealth, a U.S. company which allows individuals and small businesses to compare policies side-by-side online, and Zenefits, an American startup which automates HR functions, such as health plan enrollment, also for small and medium size companies.
The Dubai Health Authority requires that health insurance brokers and third-party administrators hold a permit. Bayzat says that it doesn’t have a broker’s license, although its website states that customers can shop and pay online for a plan. Instead, it has a partnership with two brokers, one of which is Arya Insurance Brokerage Co. Arya sells policies through Bayzat, which earns a small cut. The startup doesn’t get a commission from insurers.
In part, it needs the brokers, because of their connections with insurance companies. The relationship can be mutually beneficial, since Bayzat funnels customers to brokers. “It [Bayzat] will point you in the right direction, as in what insurers might be suitable for you,” says Janek Zawadzki, business development manager of employee benefits at insurance consultant Al Futtaim Willis.
Venture capitalists are bullish on the concept. In August, Bayzat closed a $3 million series A round from returning investor Beco Capital, and Precinct Partners in Dubai. Last year, Beco led a $1 million investment.
“There’s a whole gap in the customer service part of the [health insurance] industry,” says Amir Farha, managing partner at Beco Capital.
When Farha moved to the U.A.E. in 2008, he also struggled to find financial products that fit his needs. He even toyed with the idea of launching a comparison platform, and went as far as registering a domain name. He coincidentally called it Bayzaat, which is rooted in the Hindu word for money. “Before even knowing Talal, which is funny,” says Farha.
Bayaa and Habibi, both 29-year-old Palestinian-Americans, grew up in the U.A.E. They attended university in the U.S., with Bayaa studying bioengineering at the University of California, Los Angeles, and Habibi majoring in business administration and management at St. Mary’s College of California. When they returned to the U.A.E. in 2008, Bayaa became a financial analyst, and Habibi took a marketing job with a food distributor in the Gulf.
Launching their startup, they miscalculated how much effort it would take to run a company. “We thought this was going to be easy, that we were going to make a quick buck,” says Habibi. “Little did we know back then.”
They kept their day job, and contracted with a developer to set up and maintain their website. That turned out to be a mistake.
Running a comparison platform, which has features such as real-time pricing from insurers, meant the site was constantly in need of updating. Relying on a third party to maintain it was not the reliable way to go.
Bayaa and Habibi dropped the contractor and hired an in-house IT team. In an interesting twist, the three developers became the startup’s first full-time employees. It was only a few months later that Bayaa quit his job to devote himself to Bayzat. Habibi maintains a part-time role.
Within months of launching in 2013, they were hunting for funding. A year later, they landed $270,000 from angel investors, half from the region and the rest from the U.S.
When they shifted their focus to health insurance, they first assumed that their platform would appeal only to people looking for individual policies or family plans. They were surprised when they got requests for group policies from companies with hundreds of employees, but businesses were starting to comply with Dubai’s new health care law. Bayzat was one of the few ways to find information about policies online.
Instead of combing through a thick packet containing details about their health plan, policyholders can enter on Bayzat keywords, such as “physiotherapy,” which brings up all relevant information. With the funds from their latest round, Bayaa and Habibi are expanding their tech team to refine the technology.
Because policies last 12 months, they expect customers to renew them—potentially creating more stickiness than one-time credit card purchases. “With insurance, there’s annuity behind it; that’s exciting as a business model,” says Farha.
Bayaa and Habibi hope to expand to other markets in the region. For now, navigating Dubai’s insurance regulations should keep them busy.