Insurtech startup honcho – provider of the UK’s first reverse auction marketplace for financial services – have completed their latest investment raise as their mission to revolutionise how consumers buy insurance continues.
The Durham-based innovator has brought a further £1.2m of investment into their business with participation from crowd
investors, Insurtech Gateway and existing investors Finance Durham which was established by Durham County Council and overseen by Business Durham, and the North East Development Capital Fund (“NEDCF”), supported by the European Regional Development Fund, as they embark upon their next phase of growth.
Between 2018 and 2019 honcho raised £1.8m from a combination of crowd investors on Crowdcube, angel investors and investment house Maven Capital Partners (“Maven”), who manage both Finance Durham and NEDCF. This enabled the start-up to launch their car insurance marketplace last autumn, and to start work on preparing for expansion into new insurance markets in 2020. Thousands of consumers have signed up and used honcho since launch, with 12 insurance providers now active on the platform, selling policies from 30 insurers including Axa, Aviva, Ageas and Zurich.
honcho’s latest investment round has seen further investment from Maven’s managed funds alongside another successful crowd raise on Crowdcube where over 600 private investors took the opportunity to buy shares in the insurtech disruptor.
As part of this raise honcho also welcomes investment from venture capital firm Insurtech Gateway, the London-based incubator and fund with an exclusive focus on the insurtech sector. Insurtech Gateway were formed in 2017 and have incubated some of the insurance sector’s most exciting new tech businesses including By Miles, FloodFlash and Collective Benefits.
Commenting on the investment, honcho CEO Gavin Sewell said: “Raising investment is one of the most challenging aspects of running a startup, and we’re delighted to have achieved this £1.2m raise with the continued support of Maven and with further investment from the crowd. We’re also thrilled to welcome Insurtech Gateway to the honcho family. As specialists in our sector they will bring an immense amount of support to honcho as we enter our next phase of growth. Insurtech Gateway’s expertise across the sector extends from technological capabilities to expertise on products and consumer acquisition, and we’re looking forward to working with them.”
Sarah Slaven, Interim Managing Director of Business Durham, said: “Aykley Heads is fast becoming an important Fintech cluster for Durham, so it’s extremely exciting to be able to continue to support honcho, one of the leading companies in the sector. Their base at Salvus House offers them the room to grow and provides them with a prestigious location in the heart of the city. We’ve supported them from the beginning and really look forward to continuing to watch them fulfil their potential with the support of Finance Durham.”
Insurtech Gateway CEO Richard Chattock said: "Today's consumers rightly demand fairer, more transparent insurance. honcho's new model delivers this. It reduces commissions, eliminates bias and allows consumers to make purchasing decisions on product as well as price. We're delighted to be joining honcho's journey to revolutionising personal lines insurance distribution."
Michael Vassallo, Investment Director of Maven Capital Partners, said: “We’re delighted to support honcho’s latest fundraise, having backed the business originally in 2018, we continue to support Gavin and the team as they grow the platform, making significant enhancements and adding new insurance product lines.”
In addition to honcho’s car insurance marketplace, which itself has doubled in size since launch and is due to grow by over a dozen more insurance providers over the coming weeks, honcho’s plans for 2020 include the launch of dedicated new reverse auction marketplaces for van insurance and for learner driver insurance. As with their 2019 launch, pioneering social marketing agency Social Chain are poised to lead the charge in introducing honcho to these markets.
Talking about honcho’s 2020 growth plans, chief product officer Tom Spence said: “There are over 4 million vans on the UK’s roads and the nation’s van drivers have been at the mercy of price comparison websites for their insurance for far too long. honcho’s van insurance marketplace will launch this spring and we’ll be bringing long-overdue transparency and fairness from some of the UK’s leading van insurance providers.
“Following van insurance, we’ll be extending honcho to learner drivers. When you’re learning to drive the last thing you need is to navigate the mysterious maze of learner insurance to then get lumbered with something that isn’t right for you. honcho is going to change all of this with our special learner zone in the spring, bringing our unique reverse auction marketplace to both temporary and annual learner driver insurance.”