UK-based startup honcho has closed another successful round by combining crowdfunding and the backing of established investors such as Insurtech Gateway, Business Durham and the North East Development Capital Fund.
The new round sees the car insurance innovator fill up its tank with an additional £1.2m to fuel the growth of its reverse auction marketplace for financial services.
This is not the first time that honcho has raised money through crowdfunding. The InsurTech startup raised £735,740 in a crowdfunding campaign in January 2018. It topped up that investments with cash injections from angel investors and investment house Maven Capital Partners, which runs both Business Durham and the NEDCF, bringing the total invested before this new round to £1.8m.
“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,” said Gavin Sewell (pictured), CEO of honcho.
“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.”
honcho launched its car insurance marketplace in August 2019 and has seen it double in size since then. It plans to add over a dozen new insurers onboard in the next few weeks.
The startup also plans to use the money to launch a launch of dedicated new reverse auction marketplaces for van insurance and for learner driver insurance in 2020.
“There are over four 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,” said Tom Spence, chief product officer at honcho. “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.”
Commenting on the new raise, 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, added, “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.”
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