Digital Fineprint closes $4m funding round, with insurtech Cuvva tipped to raise next

digital-currency

  • Digital Fineprint becomes seventh UK start-up in Post/Tallt top 100 Insurtech ranking to announce raise in past 12 months   
  • Having raised $7.1m Digital Fineprint looking to open US office 
  • Cuvva expected to raise funds soon to support growth strategy after recruiting FD from Zego and former Allianz CEO as a director
  • Zego passes 100 million hours’ worth of flexible policies, equivalent to 267 million pizza deliveries
  • With $2.2bn raised in the first half of 2019, this year is on track to eclipse 2015 as a record 12 months for insurtech investment

Digital Fineprint has become the latest UK-based insurtech to announce a significant fund raising round after unveiling a $4m (£3.2m) investment at Insurtech Connect in Las Vegas today.

The news came as market commentators tipped Cuvva to follow fellow on-demand insurance specialist Zego in securing substantial financial backing for future growth.

Digital Fineprint’s latest financial boost means that the start-up has raised $7.1m to date with previous angel and venture rounds of $0.4m and $2.7m respectively led by Eos Venture Partners and Pentech Ventures. Eos Venture Partners has led the latest raise, with Pentech and other previous investors again involved.

The start-up’s technology leverages open and proprietary data to provide insurance companies a 360-view of real-time risk profiles on commercial entities.

With longstanding customers such as Hiscox, QBE and Euler Hermes already signed up, Digital Fineprint recently announced it had added RSA to its list of partners and been selected to take part in the Lloyd’s innovation programme Lloyd’s Lab.

Digital Finerpint has also added a new relationship management component to its Risk Atlas software, Renew, that keeps insurance professionals up to date on their customer needs.

North American expansion

Erik Abrahamsson, founder and CEO at Digital Fineprint told Post the money – which he preferred not to call Series A - would be used to fund geographic expansion into North America, having previously researched the Asian market.

He added North America was now the location of most interest to the start-up because of the number of SMEs, and it plans to set up an office there in next 12 months to maximize the opportunity, suggesting Connecticut, New Hampshire and Newark as possible territories to establish a presence. It presently has 25 employees.

Sam Evans, partner at Eos Venture Partners said: “Having worked with the company for the past three years we were delighted to lead this round.

“Digital Fineprint targets an underserved and rapidly-growing market and have built an approach that allows the capture, structuring and analysis of multiple new data sets to support premium growth, enhanced underwriting profitability and better customer outcomes.”

Abrahamsson added: “Sam, Carl [Bauer] and the rest of the team at Eos invested as angel investors back in 2016. Now that they have raised their flagship fund, we are honoured and privileged to be one of the first investees from the fund itself.

“Being 100% insurance-focused, the team at Eos Venture Partners are incredibly helpful and knowledgeable, which helps us rapidly scale up the DFP proposition.”

“Over the past two years Digital Fineprint has already achieved clear recognition in the insurance world for the way it uses powerful technology and big data to transform the way the insurance community profiles SME risk, thereby improving the reach and profitability of [its] clients,” continued Pentech Ventures partner Marc Moens.

“Digital Fineprint is poised to become the category leader in data-driven innovation for the insurance industry, and we are thrilled to continue to support Digital Fineprint in its next phase of growth.”

Excited by potential

Tallt founder and CEO Matt Connolly commented: “Innovation in the insurance sector is still in its infancy and over the coming years will accelerate at an unparalleled pace. UK insurtechs are particularly well regarded in the market and continued investment is essential for retaining our position as a global leader. 

“We’ve been tracking Digital Fineprint since its inception, having met and interviewed Erik on a number of occasions. They’re a great team, have a top notch product and I’m particularly excited about their potential, especially with the guys from Eos Venture Partners behind them.” 

The business becomes the seventh UK start-up on Post and Tallt’s top 100 Insurtech ranking list to announce a raise since the 2018 Insurtech Connect event with market sources predicting that Cuvva could be next.

Anorak (number 19) raised £5m Series A in November 2018; By Miles (27) raised £5m Series A in February; Zego (50) raised $42m Series B in June; Wrisk (50) raised £3m Series A in the spring; Inshur (59) raised £8.5 Series A over February and August; and Cytora (66) raised £25m Series B in April.

Other notable UK start-ups featured on the Tallt list such as number 23 Tractable ($25m in July 2018), number 38 Neos (Aviva buying majority stake in January 2018), number 47 Bought By Many (£15m Series B in July 2018) and number 76 Laka (£1.1m seed in June 2018) have all raised money since number 85 Cuvva’s £1.5m seed raise in January 2017 led by Local Globe.

One market source told Post that given Cuvva’s recent growth and future plans – it recently past one million policies sold and added Axa-underwritten travel insurance – it could well skip Series A and land on a Series B round that values the business in excess of $30m.

Cuvva to expand into ‘long term’ motor cover

According to its website Cuvva is planning to launch a ‘long term car insurance’ product soon, where the difference is policyholders pay monthly, but can cancel anytime. Its current motor portfolio extends to short term cover underwritten by Gibraltar-based Mulsanne and learner cover underwritten by First Underwriting.

For the year ending 28 February 2019 Cuvva reported a loss of £1.67m (2018: a loss of £1.43m) with £3m cash in hand and in bank (2018: £466 835), according to its most recent set of accounts at Companies House. 

The 2019 accounts note the headcount had grown from 16 in 2018 to 34 in 2019. And it is continuing to grow as Cuvva’s site presently lists 46 members of staff [and two dogs – Luca, chief barketing officer and Velvet, bark prevention officer]. Whilst as of today it is recruiting for 18 vacancies, including 12 aligned with product, two marketing roles, two finance people and two operational positions.

A further sign of the start-up’s aspirations were underlined when it employed former Allianz Partners UK and Ireland CEO Serge Corel as director of partnerships earlier this month.

Corel spent more than 22 years at Allianz Partners, formerly Mondial. Prior to taking on the top UK and Ireland role at Allianz Partners, Corel served as managing director. He spent 13 years as its chief financial officer. Allianz Partners grew its gross written premium from £20m when Corel joined in 1997 to £140m in 2017 when he left the business.

The business has also just recruited Svetlana Novikova from rival start-up Zego as its finance director, three months after her former employer became the best-funded UK insurtech to date - following its series B funding round led by Target Global.  

When approached for comment on the speculation that it is close to closing another funding round Cuvva founder and CEO Freddy Macnamara declined to comment, but added the business was “delighted to welcome Novikova to the team as FD”.

In other news gig economy insurance specialist Zego has announced that it has sold more than 100 million hours’ worth of flexible policies, with over 80% of this total coming in the last 12 months.

Zego reaps benefit of Deliveroo, Just Eat and Uber Eats deals

Zego which claims to insure a third of the UK’s food delivery market, largely through partnerships with Deliveroo, Just Eat and Uber Eats. By surpassing 100 million hours of policies, it estimates it has insured the equivalent of 267 million pizza deliveries, half a billion e-scooter rides or 137,000 months of on-demand car subscriptions. 

Sten Saar, CEO and co-founder of Zego, commented: “Hitting 100 million hours of policies sold is a major milestone for Zego and we expect this figure to significantly grow as we continue to expand rapidly across Europe.

“At Zego, we have recognised a gap in the insurance market and built a unique business model to fill it. Our digital-first approach to insurance places us at the forefront of new mobility services, and we look forward to forming new partnerships in the space.” 

Zego offers a range of policies from minute-by-minute and hour-by-hour insurance to annual cover. It also covers van and taxi fleets and has tied up with car-leasing businesses including Splend, We Flex and Europe’s self-proclaimed largest car-subscription service Drover, as well as e-scooter start-up Dott to insure its fleet across France and Belgium. 

It plans to use the recent raise to fuel international expansion and double its workforce to 150.

Record year for insurtech investment?

According to a new report published at ITC 2019, Accelerating insurance innovation in the age of Insurtech, from Deloitte Center for Financial Services, the $2.2bn raised in the first half of 2019 is already the fourth highest amount ever, trailing last year’s total by only $400m.

It added insurtechs are on pace to eclipse 2015’s record investment of $3bn, yet insurers themselves only accounted for one out of four dollars invested this year.

Broken down by sector, $270m has been invested in commercial insurtechs in the first half of 2019, $197m in customer acquisition, $597m in insurance operations, $225m in peer-to-peer insurance and $927m in personal lines.

In 2015 the breakdown was commercial ($45m), customer acquisition ($128m), insurance operations ($1.14bn) and personal lines ($1.69bn).

Last year the breakdown was commercial ($192m), customer acquisition ($362m), insurance operations ($390m), peer-to-peer ($20m) and personal lines ($1.65bn).

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