The funding has been raised to develop the insurtech’s technology and drive its expansion 

Insurtech Digital Risks has raised $10.4m (£8.04m) in series A funding round led by its investor BHL Holdings, also the owner of Compare the Market’s parent company BGL Group.

Digital Risks provides personalised, subscription-based cover for SMEs, start-ups and freelancers.

Nire Capital also participated in the round, alongside existing investors Concentric, Beazley and Seedcamp.

The funding follows a highly successful period for the London based start-up, which is growing by 25% month on month and set to triple its headcount by the end of the year.

The insurtech has also struck a number of high profile partnerships in recent months with well known SME focused brands including Revolut, Starling and Appear Here.

In a statement it said the investment demonstrates ”significant market confidence” in the business.

The funding will be used to develop its technology and drive its expansion over the next 12-18 months.

Its target market is the 5.7 million digital SMEs in the UK. The insurtech offers professional indemnity, cyber, management liability and medical malpractice insurance.

Highly fragmented SME market

Cameron Shearer, chief executive and co-founder of Digital Risks, said: “The SME sector as a whole is highly fragmented. Business owners and decision makers across a vast range of industries all have different needs and different motivations.

“The traditional players’ propositions take a generalist approach to their products and user experience. As a result millions of SMEs in the UK and across Europe are neglected and underserved.

”They are either paying too much for their policies, or not being protected against the modern risks they face.

“We’re challenging this status quo head on, modernising business insurance for the better, and building a brand that businesses want to advocate.

”Our approach looks at every insurance cover from a new perspective. Rather than asking what risks we’re willing to cover, we ask what businesses need and then find the solution.”

Shearer said that the insurtech’s “unique mix of technology and underwriting,” has created an online destination that meets all insurance requirements for SMEs, protecting entrepreneurs, freelancers and established businesses against emerging issues and technologies, without forcing them into lengthy and expensive contracts.

Shearer added that this investment will help drive further development to its product offering and increase market penetration, driving growth into new markets at home.

Leading the charge

Meanwhile, Ian Leech, chief financial officer at BHL added: “We’re living in the age of the disrupter. Across every industry new tech-led businesses are changing attitudes and processes for the better.

”In the insurance sector, a market deeply ingrained with traditional ways of working and thinking, it’s Digital Risks that is leading this charge. Offering flexible, bespoke cover to SMEs faster than ever before.

“An extremely exciting business in its field, Digital Risks is looking to continue its rapid growth across the UK. This investment will help support the business to achieve this goal,” Leech added.