KOBA is a car insurance start-up company that launched in November 2021. It offers a data-driven approach to car insurance, enabling customers to pay a fixed amount to have their car insured while it's parked, and to pay only for the distance they drive.
The company measures the usage through a small matchbox-sized device, called a “KOBA Rider,” attached to a car's on-board diagnostics (OBD) port that communicates with the KOBA smartphone app to automatically calculate driving distances and charges a per-kilometre rate for each trip.
Ensurance's invested in KOBA via a Simple Agreement for Future Equity (SAFE), a common investment mechanism for start-up technology companies.
Under SAFE, Ensurance will pay KOBA in cash for a contractual right to convert that amount into shares upon pre-agreed milestones. The investment will be made in up to five separate tranches for two years.
The deal will see Ensurance CEO Tom Kent join the KOBA board as a non-executive director. It will also provide Ensurance with exposure to a significant growth opportunity in the A$ billion gross written premium (GWP) car insurance market, with around three million Australian customers switching car insurance providers every year.
“This is a hugely compelling investment and growth opportunity for Ensurance, with KOBA's unique kilometre-based premiums offering the potential to significantly reduce insurance costs for low-usage drivers. With people increasingly working from home, and with a growing focus on reducing car use to minimise carbon emissions, I believe KOBA's products will be a very attractive offering to a growing number of vehicle owners,” Kent said.
KOBA CEO Andrew Wong has welcomed the agreement, deeming Ensurance an ideal strategic partner as it moves to scale up its business and expand its market share over the next few years.
“There hasn't been much innovation in the Australian car insurance market for a few years, so it's very exciting to have an established partner who understands the insurance business and shares our vision for delivering customer-first solutions,” Wong said. “Ensurance is a well-oiled machine which provides us with a strong insurance-first backbone from which we can continue to grow.”
Kent commented: “KOBA is a progressive, end-to-end insurance platform that uses the data generated by cars to help low-usage drivers save money. This investment represents a strong growth opportunity for Ensurance shareholders and is an exciting addition to the company's product suite.”
The strategic investment follows KOBA's milestone of raising over $500,000 for its crowdsource funding round.