Aussie-founded Cover Genius raises $119m in Series E round amid rapid growth for insurtech

Aussie-founded Cover Genius raises $119m in Series E round amid rapid growth for insurtech

Cover Genius CEO and co-founder Angus McDonald

Cover Genius, a US-based insurtech founded by former Australian travel industry entrepreneurs Angus McDonald and Chris Bayley, has raised $US80 million ($119.2 million) in a Series E round amid a year of triple-digit revenue growth for the embedded insurance provider.

The latest round, led by led by new investor Spark Capital and supported by existing investors Dawn Capital, King River Capital and G Squared, brings the total capital raised by the company since inception to US$150 million ($223.6 million) - leading Bloomberg to declare it a unicorn in 2021 with a valuation of US$1 billion ($1.5 billion).

The support comes on the heels of significant growth for Cover Genius over the past year, with revenue in 2023 surging 107 per cent.

The company, which has attracted investments from major American and European funds, has grown to more than 550 employees globally and signs up an average of two million customers a month, representing a customer growth rate of 80 per cent.

Cover Genius is a global provider of embedded insurance, which allows clients to offer their customers insurance policies for products as an add-on at the point of sale.

McDonald, a University of Technology Sydney graduate in mathematics and engineering, and Bayley, a former political reporter and one of the first team members at Google Sydney, founded Cover Genius in 2014 after establishing an online travel agency and discovered the vagaries of offering insurances to their clients.

“Chris and I pivoted our online travel business when we witnessed firsthand the challenges of distributing insurance across multiple regions and a clear opportunity to improve the insurance industry with technology,” says McDonald, the CEO of Cover Genius.

“Traditional insurance models were slow, cumbersome and frustrating for customers. We wanted to create something better – a more efficient, customer-friendly insurance experience.”

Today, Cover Genius partners with some of the world’s biggest digital businesses to provide embedded insurance to more than 30 million customers.

“The display of trust from our investors highlights the resilience of our embedded business model and potential for growth, particularly as we strategically focus on key markets like travel, retail, ticketing, and logistics,” says McDonald.

“Our collaborations with well-known brands, including Uber, Ryanair and eBay demonstrate our unique ability to create customer-centric protection solutions backed by technology, policy innovation, and industry expertise.”

Cover Genius’ key product is the XCover platform which is licensed and authorised in more than 60 countries to provide customers with “seamless end-to-end experiences” through the embedding and sale of multiple lines of insurance and protection products.

The latest capital raise will be used by Cover Genius to invest in new technology, including improved digital insurance distribution solutions, deploying artificial intelligence claims handling, and expanding the protection solutions available on the platform.

“Cover Genius’ technology platform, global presence and focus on digital claims initially caught our attention years ago,” says James Kuklinski, general partner at lead investor Spark Capital.

“By tackling common insurance obstacles such as limited market coverage, lengthy claims processes, and a lack of product diversity, the company has evolved into a category leader.

“We couldn’t be more excited to partner with the company as they continue driving more value to partners and a best-in-class consumer experience.”

Spark Capital’s investment is a major coup for Cover Genius as the venture capitalist has in the past been a backer of Twitter, Coinbase and Slack.

McDonald says the closure of the Series E funding round “marks an important milestone in our journey”.

“Cover Genius has grown from a small startup to an industry leader in the world of Insurtech,” he says.

“Despite the tech funding slowdown, this round was led by a new investor in Spark Capital with support from existing investors, including Dawn Capital, King River Capital and G Squared. 

“This display of trust from our investors highlights the strength of our embedded business model and the potential for growth as we look ahead.”

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