Commercial insurance broking startup lands UpCover $11 million Series A

Commercial insurance broking startup UpCover has raised $19 million in a Series A round.

On top of the $11 million equity investment, the insurtech also secured $8 million in debt.

The round was led by RealVC, with support from existing investors Antler Elevate’s Global Fund – Upcover was part of its inaugural accelerator program in 2019 – and Betterlabs, plus Tony and Adam Gandel’s family office Gandel Invest, as well as former Westpac boss and Beforepay chair Brian Hartzer, McKinsey Australia managing partner John Lydon and former Afterpay CFO Richard Harris.

Marshall Investments provided the $8 million debt facility.

The raise gives the startup a $45m valuation, having previously raised $2.7 million in a Seed round in July 2022 alongside $2m in debt. The insurtech has now raised $13.7m in equity funding.

UpCover was cofounded by Skye Theodorou and Anish Sinha, and launched its API-based embedded SMB insurance platform in 2021. Last year it doubled revenue and halved costs

The funds will be used for growth as UpCover launches new digital insurance products this year, expanding its offering to more 60,000 businesses already using the platform

UpCover offers the world’s fastest business insurance quoting experience. But while online-first insurance is embraced globally, in Australia over 95% of commercial insurance is still negotiated via offline brokers (although 60% of home and motor insurance is done online.

The insurtech also offers white-labelled (or embedded) insurance solutions and insurance APIs, enabling brands to offer B2B insurance.

Theodorou said they’ve defied the odds with UpCover.

“Not only has the business thrived during one of the hardest years Australia’s startup industry has seen, but we’re also competing against four of Australia’s largest companies who control 80% of our market. It’s no wonder we’re still the only startup in this sector of insurance,” she said.

“It’s telling that one in three businesses that quote with us, end up taking insurance from us. Over $20 billion worth in business insurance is sold annually in Australia”

Theodorou said businesses and business owners are often sold insurance that doesn’t fit their needs, or doesn’t properly cover them.

“It’s one of the few instances where automation is absolutely doing a better job than their human counterparts,” she said.

“Once insurance is sold, brokers don’t always check in with businesses as they grow, to ensure their coverage continues to fit their needs. It’s something we’ve built into UpCover.”

Her cofounder, Anish Sinha, said they’ve helped 1% of all Australian businesses with a fifth of the funding raised by their US and UK counterparts,

“Overseas players in this sector have spent significantly more to acquire a similar market share,” he said.

“We’re now armed with the firepower to dominate the market, quadruple our penetration, launch cutting-edge digital insurance verticals, and embed AI at the core of UpCover’s business insurance broking and underwriting technology.”

RealVC partner Paul Saunders said Australia’s $20 billion business insurance industry “has remained stubbornly analogue” and customers are “deeply unhappy” with the experience and coverage.

“This has provided an enormous opportunity for a digital disruptor to change the paradigm,” he said.

“The founding team of Skye, Anish, and Sajjad has the rare combination of deep domain knowledge, impressive execution, and technical skills. This positions the company to dramatically improve the customer experience.”