image of Cuvva CEO Freddy Macnamara
Cuvva raises £15m as targets long-term motor insurance industry
Cuvva boss said funding round had exceeded expectations.
Cuvva, the pay-as-you-drive insurance specialist, has raised £15m as it gears up to expand its portfolio with a pay-monthly product which aims to lure in tens of thousands of customers in its first 12 months.
Freddy Macnamara, founder of Cuvva, said the Series A funding round had been “above expectations” and had attracted a “good mix of investors”.
Investors in the round include RTP Global, Breega, Digital Horizon which join existing investors LocalGlobe, Techstars Ventures, Tekton and Seedcamp.
Angel investors include Dominic Burke, CEO of insurance broker Jardine Cloys Thomspon and Faisal Galaria, the former chief strategy and investment officer of GoCampare.
Cuvva’s Series A funding comes as the company prepares to target the long-term motor insurance business by launching a pay-monthly insurance product.
It claims the product will cut insurance bills for car owners significantly by cutting out the use of middlemen such as brokers and offer a simpler pricing plan than legacy operators.
By doing so, it hopes to broaden its appeal and attract tens of thousnads of customers in the first 12 months, accrdoing to Macnamara.
As an example, Macnamara said the new product is likely to be a hit with younger drivers, with flexible needs like university students.
Macnamara said the funds will be used to build the Cuvva team which he expects will double in size to 160 people over the next 18 months, adding engineers, developers, marketers and customor operations staff.
Macnamara said: “The way insurance is sold hasn’t kept up with the way people live their lives now. We buy lots of goods and services via flexible subscriptions to suit our on-demand lifestyles. Why shouldn’t you be able to do that for insurance?
"I started Cuvva when I couldn’t find flexible insurance to help me share my car. Four years on from launch we are still discovering how big the problem we are solving really is. We're now selling 3% of all UK motor insurance policies but we’ve got so much further to go. Cuvva is going to be the place where you buy all your insurance, all through our mobile app."
“The way motor insurance is sold is particularly unfair and inflexible but we can make it cheaper by cutting out the middlemen and removing the penalties for paying monthly, which hurt younger drivers or lower-mileage drivers disproportionately.”
Cuvva was founded in 2014 by James Billingham and Macnamara to serve customers who only required insurance for a limited time period. It also offers travel insurance.
According to the Financial Times, Cuvva has 250,000 customers and has sold 40m hours' worth of insurance.
Cuvva claims to have sold over a million policies and says it's the most downloaded insurance tech app in the UK.