Insurance startup Huddle has raised $19.25 million in its Series A round, after seeing 700% revenue growth in the last financial year.
Founded in 2016 by Jason Wilby and Jonathan Buck, Huddle secured a $6 million investment from Hollard Insurance later that year.
Now, it provides $1 billion in insurance coverage for about 50,000 members.
The round was led by AirTree Ventures, and also included Alium Capital, SevenWest Media, and repeat investment from Hollard Insurance.
Huddle applies artificial intelligence, machine learning and community thinking to the insurance company model, allowing customers to submit claim forms and pictures online, and to receive money or vouchers for replacement items within minutes.
“We saw the writing on the wall for what was going to become a crisis of trust,” Wilby tells StartupSmart.
There was a gap in the market for an insurance provider that could be trusted to pay out without hassle, and that had values aligned with those of its clients, he adds.
In line with this ethos, Huddle created a platform allowing clients to decide what happens to unallocated premiums.
If claims are lower than the startup budgets for, members have a say in where they’re allocated — whether it’s donated to charity, invested in efforts to clean up the oceans, or directed towards community projects.
As an insurance company, Huddle has a lot of money to invest, but has a strict policy of keeping those investments away from fossil fuels.
Wilby says the startup has seen people switching insurance providers “because they love the proposition”.
Everyone buys insurance, he adds, but “very few people have thought about it”.
The majority of Huddle’s early growth was driven by word-of-mouth, Wilby says.
Up until now, the co-founders have been focused on the technology, and at the moment, “there are more engineers than team members,” he adds.
“We haven’t done a lot of PR or anything. It’s just a team of engineers and analysts who have been really refining the product,” he adds.
“It’s exciting, because we’ve got so much headroom for growth.”
The latest funding is partly pegged for a paid marketing drive, with “a big chunk” earmarked for increasing awareness and driving client acquisition.
Huddle will also increase its headcount over the next few years, although a lot of this will be into the marketing and growth teams, as well as continuing to develop the technology and the product offering.
For Wilby, however, the value was also in the investors. The team spent a long time choosing the right people to bring on board, he says.
AirTree, in particular, was important to provide “a strong financial lead”.
It’s a VC that is able to work alongside the founders and help with big strategic decisions, Wilby says.
“They’re strong, critical thinkers, with expertise in marketing and growing brands,” he adds.
When raising, Huddle was very focused on the purpose of the business, Wilby says, and on “the reason we’ve created the model in the way that we have”.
The team had some ideas about how the model could be perceived, and there were a lot of investors out there who just couldn’t get their heads around it.
“You can try to convince them … but generally, take your energy elsewhere,” Wilby advises.
“Rather than trying to please everybody, you can really gauge whether someone sees the world the same way you do,” he adds.
“Those are the moments that are magic,” he adds.
“Be true to who you are and you will quickly realise who are the best people to work with.”
NOW READ: Industry association Insurtech Australia formed to support local insurance innovation
