Online insurance broker Upcover has raised a $19 million in Series A equity and debt round, capitalising on a solid year of growth that has seen the fintech startup double revenue and halve its costs.
The current round, comprising $11 million in equity and $8 million in debt, has been led by RealVC with support from Antler Elevate’s Global Fund, Betterlabs and Gandel Invest, the family office run by Tony and Adam Gandel. Marshall Investments provided the $8 million debt facility.
The funds will be used to support Upcover’s growth as it launches new digital insurance products to the market in 2025, expanding its offering to the more than 60,000 businesses already using the platform.
“We’ve defied the odds with Upcover,” says Upcover co-founder Skye Theodorou.
“Not only has the business thrived during one of the hardest years Australia’s startup industry has seen, but we’re also competing against four of Australia’s largest companies who control 80 per cent of our market. It’s no wonder we’re still the only startup in this sector of insurance.”
Sydney-based Upcover was founded by Theodorou, Anish Sinha and Sajjad Naveed, initially to help gig workers simplify complex insurance schemes, but it has since grown to help companies access market-leading business insurance products including public liability, professional indemnity, directors’ liability insurance and dedicated specific insurance for scaling and technology businesses.
Upcover also facilitates “one click financing” for business insurance products offered on its platform, along with white labelled insurance solutions and insurance APIs to enable brands to offer B2B insurance.
“It’s telling that one in three businesses that quote with us end up taking insurance from us,” says Theodorou.
“Over $20 billion worth in business insurance is sold annually in Australia. Only 5 per cent of it is traded digitally.
“Despite the majority of it being sold by brokers, it's still by-and-large not relevant to the customer. Time and time again, businesses and business owners are sold insurance that simply doesn’t fit their needs, or even worse, doesn’t properly cover them.”
Theodorou says the Upcover platform is one of the “few instances” where automation is “absolutely doing a better job than their human counterparts”.
“Once insurance is sold, brokers don’t always check in with businesses as they grow, to ensure their coverage continues to fit their needs,” she says. “It’s something we’ve built into Upcover.”
Upcover notes that it has managed to double revenue in the past year while cutting costs in half, and points to the significant potential that its AI-powered platform has to capture a bigger share of the sector domestically.
The company says that despite a significant shift towards online-first insurance platforms abroad, more than 95 per cent of commercial insurance in Australia is still negotiated via offline brokers. This compares with more than 60 per cent of transactions online for home and motor insurance.
“We’ve always operated with a capital scarcity mindset, that has helped us thrive in what has been one of the startup industry’s toughest years to date,” says Upcover co-founder Sinha
“In less than three years, and with a fifth of the funding raised by our US and UK counterparts, we’ve helped 1 per cent of all businesses in Australia to find the right insurance. Overseas players in this sector have spent significantly more to acquire a similar market share.”
Sinha says the new $19 million debt and equity funding gives Upcover “the firepower to dominate the market, quadruple our penetration, launch cutting-edge digital insurance verticals, and embed AI at the core of Upcover’s business insurance broking and underwriting technology”.
“The business insurance industry has seen a string of M&A and private equity buyouts in the last couple of years, reducing the choice for Australian businesses.
“Staying independent, remaining nimble and cost conscious, and injecting new capital will enable Upcover to challenge the status quo of the analogue incumbents and disrupt the commercial insurance industry in 2025 and beyond.”
Melbourne-based Real VC, which has backed the likes of technology business Livewire and cleantech startup Greener, sees big potential for Upcover to shake up an industry that has been slow to adopt the digital revolution.
“The $20 billion Australian business insurance industry has remained stubbornly analogue, with the customer deeply unhappy with the experience and coverage,” says Paul Saunders, partner at RealVC.
“This has provided an enormous opportunity for a digital disruptor to change the paradigm.”
BetterLabs, which co-led Upcover’s $2.7 million seed round along with Antler Elevate, has been impressed by Upcover's “remarkable growth trajectory” amid a tough startup environment.
“We are very proud to have led their seed round and continue to believe in their ability to further disrupt the business insurance market in Australia,” says James Edwards, CEO of BetterLabs.
“This Series A round, led by RealVC and supported by BetterLabs, will provide the firepower for Upcover to expand their innovative digital product offerings, continue on their remarkable growth trajectory and solidify their position as the leader in the Insurtech space."
With the Series A wrapped up, Upcover has raised a total of $23.7 million to date, $13.7 million of which is equity funding.
Upcover launched its current platform in 2021, backed by Antler Australia’s first local fund which raised $46 million.
“At Antler Elevate, we back exceptional founders who are leveraging technology to transform industries,” says Fady Abdel-Nour, partner at Antler Elevate.
“Upcover is redefining the insurance experience for small businesses and independent workers, making it more accessible, affordable and frictionless.
“Their strong execution, deep industry expertise, and bold vision align perfectly with our investment thesis. We’re excited to support Upcover as they scale and reshape the future of insurance."
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