LONDON — PremFina, a British insurtech startup that aims to make insurance more accessible, has raised £27 million ($US36 million) in a funding round led by Rakuten Capital, the investment arm of Japanese e-commerce firm Rakuten.
PremFina, which wants to “promote financial inclusion” by removing lump sum payments from insurance premiums, secured investments from Rakuten, as well as Draper Esprit, Thomvest Ventures, Emery Capital, Rubicon Venture Capital, and Talis Capital. The company’s founder, Bundeep Singh Rangar also invested.
The funding round, which included both debt and equity, saw the equity portion oversubscribed by three times, the company said in a press release.
“The participation of outstanding investors from Toronto to Tokyo in our oversubscribed round highlights the vast opportunity ahead for PremFina,” Rangar said.
“Premium financing is an industry that’s been crying out for innovation. The incumbents have remained largely unchallenged due to age-old barriers to entry, such as the lack of funding for insurance start-ups, costs and time of regulatory compliance and significant investment in technological capability needed to meaningfully enter the market.”
PremFina’s product effectively provides a means for insurance brokers to communicate with their customers, while also enabling brokers to offer finance to their clients, eliminating the need for a lump sum payment on insurance policies.
Rangar believes that the product is similar to Uber in the way it connects the two parties, and according to Bloomberg, has dubbed PremFina the “Uber of premium finance.”
Unheard of a few years ago, insurtech has become one of the hottest areas of investment for venture capitalists over the past 18 months. Inspired by the success of fintech startups, investors and entrepreneurs are keen to take on the paper-heavy world of insurance and bring it into the digital and mobile age.
In September, a report from Accenture showed that more than £200 million has been invested into UK insurtech so far this year amid a flood of interest from investors.