Insurance tech company Cover Genius has scored $15 million in fresh funding from King River Capital and Leap Capital as it looks to win more global deals.
The Sydney-based start-up, which was founded in 2014 by Angus McDonald and Chris Bayley, specialises in providing insurance to customers of internet-age businesses in fields such as mobility, retail, travel, property and gig economy businesses in Europe.
Since the onset of COVID-19, Cover Genius’ international growth in e-commerce has significantly accelerated, with the company locking in deals with the likes of South East Asian e-commerce platform Shopee, online homewares store Wayfair, bluetooth tracking device Tile, and eBay.
Mr McDonald said the company had made the decision to try and use COVID-19 as an opportunity.
“With e-commerce booming, it made sense for us to take a bit of extra money and use it to push on the momentum we had with these [new] partners and set ourselves up for the future, as well as for acquisitions of other businesses that could be distressed, or a good fit,” he said.
“This year we started expanding into Asia and there is a whole raft of really great digital businesses spaced out there.
“The Shopee partnership was all done on Zoom … and it’s the largest e-commerce platform in South East Asia.”
Mr Bayley and Mr McDonald started the business after failing to find an insurer to sell policies to the overseas customers of their online travel business. Because they had customers from Germany to Latin America, they could not find one business that could sell policies to customers in all countries.
“The lack of a co-ordinated global solution and platform is why we exist,” said Mr Bayley, who formerly ran Google’s insurance team in Australia.
Monthly Cover Genius customer numbers have gone from about 120,000 in January to more than 200,000 in October, driven by an increase in business-to-business partners from 28 in June to 40 in October.
Even among Cover Genius’ travel clients, Mr McDonald said business had started to return, after taking a big hit earlier in the year thanks to COVID-19.
Cover Genius’ latest capital raise comes in two parts, with one-third of the funding debt.
The debt capital from Leap has a three-year term.
“Venture debt has been a relatively new concept in Australia, but it’s a fairly well-worn path in the US,” Mr McDonald said.
“It gives us a much more secure capital structure in the business.”
VC fund King River Capital first bought into the company last year and partner Chris Barter said the fund had been pleased it had expanded quickly into new geographies and industry verticals.
“The huge demand Cover Genius is seeing from global e-commerce platforms as they look for point of sale insurance to support their customers and drive business has been impressive,” he said.
“We’re delighted to be leading this latest financing to support this growth and a management team with the vision, expertise and capabilities to realise the significant global opportunities.”
Cover Genius’ platform is suitable for any line of insurance from any country. Its payments platform, XClaim, can also deliver insurance claim payouts to any bank or e-wallet account globally.
Mr Bayley said businesses were getting frustrated with off-the-shelf insurance packages offered by traditional insurers, but he doubted the incumbents would be capable of creating plans more adaptable and suitable for today’s online businesses.
“The cost to go and manufacture a brand new policy is somewhere north of $1 million. If they can’t see that it will produce that million, or solve around that, it won’t get done,” he said.