UK Private equity firm Maven Capital Partners (Maven) has invested a further GBP750,000, in car insurance platform, Honcho Markets (honcho).
The funding has been provided by Maven VCTs (GBP322,500), North East Development Capital Fund, supported by the European Regional Development Fund (GBP322,500) and the Finance Durham Fund, established by Durham County Council (GBP105,000). The follow-on investment will support the business as it enters its next phase of development to launch the product nationally, add new insurance product lines and make significant enhancements to its platform. The investment will also support the creation of 10 jobs over the next 12 months, bringing the total staff numbers to 15.
honcho has developed an innovative platform which provides consumers with a transparent, cost-effective and engaging way of buying insurance products and services. Through honcho’s reverse auction marketplace, insurance companies bid for consumers’ business, which ensures a highly competitive quote and puts their interests at the heart of the transaction. The firm raised GBP850,000 to fund its app launch last year, securing GBP200,000 more than it intended to raise, and closing the investment window nine days early. The initial funding round facilitated the platform build, development of mobile and web apps, Financial Conduct Authority (“FCA”) authorisation, and the launch of marketing campaigns.
The UK consumer insurance industry is the largest in Europe and the third largest in the world, with 911 authorised general insurance companies in the UK alone. The market is currently dominated by price comparison websites which are increasingly being scrutinised for a lack of transparency.
honcho’s management team has significant experience in the industry. CEO Gavin Sewell has over 20 years’ experience in banking and finance and has previously scaled and successfully exited his own FinTech start up. Commercial Director, Frank Speight, is highly experienced in financial services having previously worked in both banking and insurance for blue chip organisations. The business also has a strong board, with former CEOs and directors of KPMG, Northern Rock PLC, Quantum Pharma PLC and BT Global Services all advising the management team.
Alex Marsh, who led the deal for Maven, says: “Car insurance is becoming increasingly expensive, particularly for young people, and honcho’s proposition will provide a fun, engaging and more cost-efficient way of purchasing insurance products via its unique reverse auction marketplace model.
“Gavin has assembled an exceptional management and advisory team around him and has made impressive progress since the Finance Durham Fund originally invested alongside the crowd. The engagement and interest honcho has already received from the insurance and broker community has been very encouraging and I’m excited to now see the product launch imminently, after months of hard work from the team.”
Sewell, CEO of honcho, says: “The past year has been an incredible journey for honcho and we are delighted to be able to today announce this significant investment to enable our next phase of growth. The team at Maven have been supportive and engaged partners since early 2018, and we are encouraged by their continued belief in the honcho proposition, and in our ability to disrupt what is becoming an ever more distrusted market.
“Our growth plans are already well advanced as we look beyond our imminent full launch into the car insurance sector and into our next markets. These will include bringing honcho’s disruption to the home and contents insurance market as well as to those of van and learner driver insurance. Our commercial team are already in negotiation with a number of potential market participants, including major household names, who see the value that honcho can bring to their businesses. This investment accelerates our next phase, and our talented team can’t wait to get started.”
Sarah Slaven, Operations Director of Business Durham, says: “Aykley Heads is fast becoming an important Fintech cluster for Durham, so it’s extremely exciting to be able to support honcho, one of the leading companies in the sector. Their base at Salvus House offers them the 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 the Finance Durham fund.”
Cllr Carl Marshall, Durham County Council’s Cabinet member for economic regeneration, says: “We’re delighted to once again be supporting honcho through our Finance Durham Fund and helping it to deliver new jobs. Our Powered by People campaign highlights what a great place County Durham is to do business and the exciting developments our investments are helping honcho to make are testament to that.”
