A new app for motorists raises £850k following successful funding round
A new app called honcho - designed to reduce insurance costs for motorists - is to be launched following a successful crowdfunding campaign.
The team behind the app closed the investment window (after approaching CrowdCube in late November 2017) following major support for its ‘disruptive’ proposition.
The app offers UK drivers and investors the chance to take a stake in the company, after EU funds allocated to support the launch were put on indefinite hold.
Gavin Sewell, CEO at honcho, said: “We are delighted to have raised significantly more than our target and to now be able to make progress on the next phase of the honcho project.
“The support we have received since the launch of the crowdfunding campaign has been phenomenal and we are thrilled to have secured investment from numerous CrowdCube Investors.
“honcho will be a great asset to the UK consumer insurance market and revolutionise the industry for drivers, in particular young motorists who face real challenges in securing a competitive deal.”
A conditional investment of £150k was made from the Finance Durham Fund, managed by Maven Capital Partners, pending a successful crowdfunding campaign.
The £650k target had been reached and overtaken, now standing at over £800k.
Frank Speight, honcho’s commercial director, added: “The honcho campaign has been successful in not only reaching, but exceeding its initial target investment by a third - securing a total of £850k, with funds from 713 investors.”
The business aims to compete with price comparison websites, where prices are usually inflated as a result of insurers passing the cost of being listed onto consumers.
Unlike price comparison websites, which charge insurers large commissions, insurers pay honcho £1 for the right to bid as many times as they like for a single customer, allowing them to reduce premiums for drivers, incentivising them to do so in order to win custom.
By reducing commission costs for insurers and the fees charged by price comparison sites (which can be £60 or more for a single policy), savings will be passed on to honcho customers, to further drive down car insurance premiums.
Sewell added: “We believe honcho can revolutionise the insurance market. It benefits both motorists and insurance companies, helping to end the blight of spiralling insurance costs which are causing misery for many.”