Melbourne venture firm RealVC has led an $11 million Series A investment round in commercial insurance disruptor UpCover.
Sydney-based UpCover has also secured $8 million in debt funding from Marshall Investments, the Sydney family office of Sportscraft owner John Marshall.
The round received additional institutional support from existing investors Antler, through its Elevate Global Fund, and BetterLabs, the venture capital fund backed by Western Australia motorists’ organisation RAC.
Other investors included Gandel Invest, the family office of Tony and Adam Gandel and former Westpac chief executive Brian Hartzer, McKinsey Australia managing partner John Lydon, former Afterpay chief financial officer Richard Harris and ex-Zurich Insurance executive Colin Morgan.
This latest capital raising values UpCover at $45 million. The business previously raised seed equity funding of $2.7 million in July 2022 led by Antler and BetterLabs plus $2 million in debt.
UpCover founders Skye Theodorou, chief executive, and Anish Sinha, chief financial officer, met after being individually accepted for Antler’s first Australian technology entrepreneur development program in 2019. Theodorou had earlier worked in the Australian operation of Zurich Insurance and Sinha, then a recent immigrant to Australia, had worked in India as an equities analyst at Goldman Sachs and in a venture-backed start-up. They were later joined by chief technical officer Sajjad Naveed.
UpCover’s technology was initially developed to provide easy access to insurance for gig workers. The platform was launched in 2021 and has since morphed into a provider of online access to commercial insurance products for all Australian small businesses. This positions it in a $10 billion-a-year market competing against four large insurance companies that hold 80% of the business.
But Theodorou said UpCover had carved out its own niche, doubling its revenue and halving its costs last year.
She said one in three of the businesses that seek a quote from UpCover end up insuring through its platform.
RealVC partner Paul Saunders said the Australian business insurance sector had remained “stubbornly analogue” providing an enormous opportunity for a digital disruptor.
UpCover targets specific niches of commercial insurance such as directors insurance designed for start-up founders; cyber and privacy insurance and indemnity policies for allied health professionals.
Sinha says the team plan to use the fresh capital to develop new products and to embed artificial intelligence (AI) in their broking and underwriting processes.
Image: UpCover’s Sajjad Naveed, Skye Theodorou and Anish Sinha.