London-based insurtech Digital Risks has raised US$10.4 million (around £8 million) in a Series A funding round led by BHL Holdings, the majority owner of comparethemarket.com parent BGL Group. The round was also participated in by Nire Capital as well as existing investors Concentric, Beazley, and Seedcamp.
Growing 25% month on month, Digital Risks said the funding will be used to further develop its technology and drive expansion over the next 12 to 18 months. The start-up provides subscription-based business insurance to small- and medium-sized enterprises.
“The SME sector as a whole is highly fragmented,” noted Digital Risks chief executive and co-founder Cameron Shearer. “Business owners and decision-makers across a vast range of industries all have different needs and different motivations.
“The traditional players’ propositions take a generalist approach to their products and user experience. As a result, millions of SMEs in the UK and across Europe are neglected and underserved. They are either paying too much for their policies, or not being protected against the modern risks they face.”
Shearer asserted that they are challenging this status quo “head on” by modernising business insurance and asking what prospective policyholders need instead of what risks the provider is willing to cover.
“Through our unique mix of technology and underwriting, we’ve created an online destination that meets all insurance requirements for SMEs, protecting entrepreneurs, freelancers, and established businesses against emerging issues and technologies, without forcing them into lengthy and expensive contracts,” claimed the CEO.
“This investment will help drive further development to our product offering and increase market penetration, driving growth into new markets at home.”
According to Digital Risks – which has secured partnerships with the likes of Starling, Revolut, and Appear Here – the business is set to triple its headcount by the end of the year.
Commenting on its backing, BHL chief financial officer Ian Leech stated: “We’re living in the age of the disrupter. Across every industry new tech-led businesses are changing attitudes and processes for the better. In the insurance sector, a market deeply ingrained with traditional ways of working and thinking, it’s Digital Risks that is leading this charge – offering flexible, bespoke cover to SMEs faster than ever before.
“An extremely exciting business in its field, Digital Risks is looking to continue its rapid growth across the UK. This investment will help support the business to achieve this goal.”