Bought By Many, an insurance technology start-up that uses social media and search data to offer insight-driven insurance to customers, has closed a GBP7.5 million (USD9.5 million) Series A funding round.
The round was led by Octopus Ventures, with Munich Re/HSB Ventures participating, as well as existing Bought By Many investors.
The funding announcement comes as the business also reveals it has signed a long-term insurance agreement with Munich Re and with their Digital Partners business unit that will enable the company to launch its own insurance products and expand into new territories.
Bought By Many has developed a proposition enabling individuals with specific insurance needs to get better insurance offers from existing providers through collective buying power. Examples include pet insurance for rare breeds and travel insurance for people with medical conditions.
By analysing over 550 million rows of search data and responding to specific customer needs, the company has attracted a membership of over 250,000 users and is enjoying year-on-year revenue growth of over 100 per cent.
According to Swiss Re, 40 per cent of insurance premiums are in the “long tail” of niche insurance needs. These needs are neglected by direct insurers and price comparison websites.
The investment will enable the launch, in early 2017, of a new range of Bought By Many-branded insurance products that will leverage its mobile-first technology platform. The products have been co-created using customer feedback, including almost 40,000 comments made on social media. In addition, Bought By Many will develop its distribution relationships with third-party insurers, both in the UK and internationally, and continue to provide impartial guidance on the best cover.
The number of funding deals to insurance tech start-ups hit a record number of 173 in 2016, up from 122 in 2015, according to venture-capital research unit CB Insights. Total funding for insurance start-ups hit USD1.69 billion (GBP1.37 billion) in 2016. Insurance is a USD4.6 trillion (GBP3.6 trillion) global market, accounting for 6.7 per cent of global GDP, but, relative to its size, has not yet seen the same level of funding as other sectors such as fintech.
Steven Mendel, co-founder and CEO of Bought By Many, says: “This commercial agreement and investment marks another important milestone in our journey to transform the customer experience of insurance. In partnership with Munich Re, we can now create a full stack insurance proposition, satisfying the unmet customer needs revealed by both our data analytics and ongoing conversation with our 250,000 members.”
Andy Rear, CEO of Munich Re’s business unit Digital Partners, adds: “Digital Partners is a global venture designed to partner with the world’s leading insurtech companies. We are excited to be helping Bought By Many realise their vision of transforming the customer experience of insurance.”
Malcolm Ferguson of Octopus Ventures adds: “I am delighted Octopus is leading this round. Bought By Many’s innovative distribution model and technology platform, combined with their exceptional traction with customers and world-class team, puts them among the world’s leading insurtech start-ups. The commercial agreement with Munich Re promises to super-charge this.”
