Sydney-based insurtech Butter Insurance is gearing up for its national debut after closing a $1.3 million pre-seed funding round backed by Flying Fox VC, Quokka Ventures, FB10X adVentures and Startmate.
Founded in 2021 by ex-lawyers Steph Skevington and Cassie Bell, Butter Insurance will allow its users to view and manage their insurance policies, track claims and update payments from one central web-app. The platform aims to democratise access to insurance, particularly for young people and renters, by offering subscription-style insurance policies at checkout.
Described as an ‘AppleCare meets Afterpay’ solution, users will be able to choose whether they pay for their insurance on a monthly or yearly basis, and will also have the option to back out at any point without paying cancellation fees.
The company plans to launch its direct-to-consumer offering this month, which will allow consumers to insure electronics such as iPhones and laptops within sixty days of purchase via its platform.
The raise comes more than four months after Startmate revealed Butter was one of a dozen companies chosen to be part of its 2022 Winter cohort, which awarded participating startups $120,000 at a $1.5 million post-money valuation for founders that did not previously raise capital.
“Insurance is the un-sexy corner of financial services that has been ignored for too long. Our goal is to provide more tailored ways for people to insure only the things they care about. Whether that’s their laptop, jewellery, snowboard, the customer is in complete control,” Bell said.
“By partnering with retailers and using open banking integrations, Butter aims to make the process of taking out insurance seamless and simple. You get the flexibility of a single-item policy, and the convenience of purchasing through any store at checkout.”
Butter Insurance recently secured its first major partnership deal with Australian Payments Plus (AP+), which brings together Australia’s three domestic payment providers: BPAY Group, eftpos Australia and NPP Australia. It marks the first time an insurance solution will be embedded within the Australian payments system.
The collaboration will see Butter Insurance integrate with eftpos’ eQR Digital Marketplace - an alternative payment option that allows consumers to make payments with their smartphone by scanning a QR code.
“Research has shown that having an insurance option at checkout can increase spend and improve customer loyalty. However, a lot of retailers do not want to venture into insurance as it detracts from their core business offering,” Bell said.
“We are offering a plug-and-play solution with a fresh brand that speaks to customers.”
Skevington stressed that Butter Insurance is "not another dodgy warranty product."
“Our policies are also designed to meet the lifestyles and expectations of our customers,” she said.
“You’re covered for accidental damage and theft anywhere in the world, not just the four walls of your home, which really matters when you’re walking around with an $1,800 phone in your pocket every day.
“We’ve created Butter to improve financial wellness — to proactively protect what matters for a few dollars a month, instead of putting thousands of dollars on a credit card to replace an item when accidents occur.”
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