Fruga, a Manchester-based InsurTech using open banking to reward policyholders, has secured £1m in funding to expand its platform and help consumers bring down what they pay when their insurance comes up for renewal.
The round was backed by NPIF II – PXN Equity Finance, a fund run by PXN Ventures under the Northern Powerhouse Investment Fund II, alongside Haatch, a UK venture capital firm that pairs funding with practical support for founders.
The company, which had been self-funded until now, intends to use the capital to expand its headcount, with significant appointments planned for the first quarter of 2027. It also aims to grow its client roster, having developed a pipeline of well-known household insurers and managing general agents.
Through Fruga, policyholders connect a bank account or a credit or debit card to their insurance cover via open banking. Purchases made with chosen partners in sectors such as travel, groceries and high street retail generate “insurance credits”. These accumulate across the year and are applied as a discount at renewal, frequently worth more than £150, while also offering benefits during the life of the policy.
Money Expert is among the firms already working with Fruga. It has deployed the technology so that its customers collect credits whenever they shop with participating brands, gradually building a fund to offset insurance bills, which continue to rank among the biggest costs facing households.
Insurers are also able to integrate the platform under their own branding, allowing them to collect data and maintain contact with policyholders throughout the year rather than only at moments such as a claim or renewal. McCarthy offered the example of a household acquiring a pet. If transaction data shows a customer purchasing pet products, the insurer could propose pet cover before that person turns to a price comparison website.
Fruga built its platform after identifying that insurance could gain from an ongoing value layer and open banking, much as consumer banks such as Monzo and Revolut have done. The approach lets insurers hand benefits to customers while using data to gain a deeper understanding of them.
Fruga CEO and founder Ross McCarthy said, “Insurers hold some of the biggest customer bases in the country, yet the industry has trained those customers to see their policy as a price and nothing more. Every renewal sends them back to the comparison sites, and the insurer that wins them this year loses them the next. We started Fruga to take customers out of that aggregator cycle and put real value back at the heart of the relationship. Customer value and data insights is what makes that possible.
“With open banking, an insurer can understand its customers better than anyone else: what’s changing in their lives, what they need next, and how to reward them every day, not just at renewal. That turns renewal from a price check into a reason to stay. This investment means we can bring in top talent to build that out, and our ambition is clear: to become the data layer that powers how UK insurers know, serve and keep their customers.”
PXN Ventures senior investment associate Joe Ball said, “Insurance is a huge market, but the relationship between providers and their customers has remained largely unchanged for years. Most consumers only hear from their insurer when it’s time to renew, and price is often the deciding factor in whether they stay or switch.
“In response, Ross and Asaf have developed a proposition with clear commercial potential, and we’re looking forward to supporting them as they grow their team and bring the technology to more partners across the market.”
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