The current funding round will help the insurtech grow its marketplace
Durham-based insurtech startup honcho has closed a £1.2m investment round as it embarks on its next phase of growth.
Crowd investors include London-based incubator Insurtech Gateway as well as existing investors Finance Durham – a fund established by Durham County Council that is overseen by Business Durham and the North East Development Capital Fund (NDECF), and supported by the European Regional Development Fund.
Honcho’s latest investment round has also received further support from investment house Maven Capital Partners, via its managed funds. This is alongside another successful crowd raise on Crowdcube, where over 600 private investors took the opportunity to buy shares in honcho.
The insurtech now hopes to launch van insurance and learner driver insurance this spring.
Honcho believes its van insurance proposition will bring transparency and fairness from some of the UK’s leading van providers by applying the same reverse auction concept it has in place for car insurance - this enables customers to input their insurance requirements and then insurers can place bids of their insurance offers in an attempt to win drivers’ custom.
Tom Spence, honcho’s chief product officer, said: “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.”
Spence highlighted that there are over four million vans on the UK’s roads and, in his opinion, the nation’s van drivers have been at the mercy of price comparison websites for far too long.
The insurtech’s car insurance marketplace has doubled in size since its launch. Moving forward, social marketing agency Social Chain will be introducing honcho to the new markets it is venturing into.
Chief executive at honcho 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.”
Sewell added that honcho is thrilled to welcome Insurtech Gateway to the 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,” Sewell said.
Insurtech Gateway’s chief executive 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.”
Between 2018 and 2019, honcho raised £1.8m from a combination of crowd investors on Crowdcube, angel investors and Maven Capital Partners, who manage both Finance Durham and NEDCF.
This enabled the startup to launch their car insurance marketplace last autumn and start work on preparing for expansion into new insurance markets in 2020.
Thousands of consumers have signed up and used honcho since its launch, with 12 insurance providers now active on the platform, selling policies from 30 insurers including AXA, Aviva, Ageas and Zurich.
Sarah Slaven, interim managing director at 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 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.”
Michael Vassallo, investment director at Maven Capital Partners, added: “We’re delighted to support honcho’s latest fundraise, having backed the business originally in 2018. We continue to support [Sewell] and the team as they grow the platform, making significant enhancements and adding new insurance product lines.”
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