Sydney startup upcover raises $4.7m to disrupt “overcomplicated” insurance landscape
From its origins catering to the precarious gig economy with simplified insurance offerings, Sydney-based startup upcover has expanded its client base over the past year to SMEs and independent contractors, fomenting a shake-up in the marketplace as an insurtech disruptor.
To support this vision for the company with 5,000 small businesses now on its register, upcover has announced a successful $4.7 million raise with support from early-stage venture capital firms Antler Australia and Betterlabs.
The funds will go towards customer acquisition and product development for the technology platform, which enables any online business or brand to become a distributor of insurance products and monetise its existing membership and customer base.
“The journey of building upcover has been an incredible ride. With the platform live, and our customers loving the experience we offer, we know we are onto something unique,” said upcover co-founder Skye Theodorou, who established the business in 2019 with Anish Sinha.
Both were finalists in the Sydney Young Entrepreneur Awards in 2020.
“To be backed by some of the best in the insurance and banking business has been an incredible way to close out our seed fundraise. The insurance industry has long been plagued by convoluted questionnaires, overcomplicated terms, and lengthy quote timeframes, and upcover is changing all of this.”
The seed round, comprising $2.7 million equity and $2 million debt, also includes support from LMI, QBE General Manager Patricia Priest, Etika CFO Raf Uy, Bricks and Agent co-founder and CEO Rafael Niesten, and Global Life APAC ex-CEO Colin Morgan.
Partnering with market-leading insurers, upcover aims to simplify and digitalise tailored insurance for small and medium businesses (SMBs) and sole traders.
“SMB insurance is a $320 billion industry globally, and it’s valued at $10 billion in Australia, with four incumbents controlling 80 per cent of the market. upcover is democratising the ecosystem by allowing any business, brand or online marketplace to become distributors of insurance policies and in the process allowing them to monetise their customer base,” Anish Sinha said.
“By making insurance policies programmatically accessible, we’ve opened up the ecosystem, so developers and/or brands can embed an insurance checkout within their brands’ user experience.”
Upcover has experienced substantial growth in the past eight months since launching its first embedded API insurance platform for SMBs, growing 20 per cent month-on-month on insurance premiums and policies underwritten.
Having recently launched four new insurance products, upcover sees pioneering Australia’s first SMB embedded insurance offering as its key driver of growth.
“upcover is BetterLabs’ first investment into the Australian insurtech space – the calibre of the founding team, their innovative business model and traction they have gained in the market to date present a fantastic opportunity. We are very excited to now journey with them as they scale their business off the back of their recent seed round,” Betterlabs CEO James Edwards said.
In the last quarter, the business grew its quarterly sales by 70 per cent against the previous quarter, which was off the back of 100 per cent sales growth in the quarter before that.
Providing insurance quotes after posing two questions, upcover offers uncomplicated, jargon-free insurance through a single insurance API (application programming interface) to connect with insurers.
“upcover is led by an exceptional founding team, and we have been an enduring supporter since their very first round. We believe they are building towards a huge insurtech opportunity,” Antler APAC managing partner Bede Moore said.
By the end of 2022, upcover will offer live professional indemnity, public and products liability, cyber privacy liability, COVID-19 bounceback insurance and commercial motor (incl. rideshare and delivery), tools of trade, glass and personal accident and management liability.
LMI, QBE General Manager Patricia Priest is delighted to be backing a female founder for her first start-up investment.
“Coming from a background in financial services, it’s inspiring to see the new ideas and fresh thinking that upcover is bringing to the table,” she said.
Partnering with market-leading insurers, including products underwritten by ProRisk, upcover previously raised roughly $900,000 in May 2020.