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Manchester-based insurtech Fruga has agreed terms on a £1 mn institutional funding round backed by PXN Ventures and Haatch, securing investment to expand its open banking technology and help insurers improve customer retention through spending-linked rewards.
The investment comes from NPIF II – PXN Equity Finance, managed by PXN Ventures as part of the Northern Powerhouse Investment Fund II, with participation from venture capital firm Haatch. The companies have not disclosed how the £1 mn will be allocated between the investors.
- Fruga has agreed its first £1 mn institutional funding round, backed by NPIF II – PXN Equity Finance and Haatch, to expand its technology and insurance partnerships.
- Its open banking platform converts rewards from everyday spending into insurance credits, with customers potentially accumulating discounts exceeding £150 on insurance renewals.
- Two major insurer partnerships are expected to go live later in 2026, while the company plans product and engineering recruitment in early 2027.
The funding will support product development, recruitment and customer growth as Fruga prepares to launch integrations with additional insurance providers. The company expects to make key operational, product and engineering hires, including recruitment planned for the first quarter of 2027.
Fruga has developed a platform that connects everyday consumer spending with insurance savings. Customers can earn rewards through purchases with participating retailers and convert them into insurance credits that reduce the cost of their policies.
The company claims to be the first business to combine open banking and direct savings within the insurance sector in this way.
Its commercial strategy focuses on working directly with insurers, enabling providers to introduce the rewards system to existing customer bases while gaining additional opportunities to engage policyholders between renewals.
How Fruga uses open banking to reduce insurance costs
Fruga’s technology allows customers to connect their bank account, credit card or debit card to an insurance policy through an open banking-enabled platform.
When customers make qualifying purchases with participating partners, including supermarkets, travel providers and high street retailers, they accumulate insurance credits.
These rewards can subsequently be used to reduce insurance costs, including premiums due at renewal.
According to Fruga, customers can often accumulate discounts exceeding £150 through regular spending with participating partners. The company presents the model as a way for policyholders to reduce insurance expenses without fundamentally changing their purchasing habits.
The technology also provides insurers with an alternative approach to customer loyalty.
Insurance providers traditionally have limited direct engagement with customers outside claims, policy changes and annual renewals. For many households, renewal is principally an opportunity to compare premiums and consider switching providers.
Fruga aims to make the relationship more continuous by linking everyday purchases to measurable savings on insurance.
The company argues that regular rewards can give customers an additional financial reason to remain with their existing insurer, potentially reducing customer attrition and reliance on price-led retention strategies. Its platform can also be incorporated into insurers’ existing customer-facing services under their own brands.
Beyond the consumer rewards function, Fruga provides transaction-derived information that insurers can use to better understand customers’ spending patterns and potential changes in financial circumstances.
The company says these insights could help identify emerging insurance needs and opportunities for more personalised engagement.
Technically, the platform operates between banking data and insurers’ customer relationship management systems, combining financial transaction information with customer incentives and retention tools.
The commercial proposition therefore has two elements: direct savings for policyholders and additional customer insights for insurance providers.
Whether those capabilities translate into improved retention will depend on customer participation, the value of the rewards accumulated and insurers’ ability to use the resulting information effectively.
Insurance partnerships and commercial development
Fruga has reported growing interest from established insurers and managing general agents (MGAs), with its commercial progress contributing to investor confidence during the fundraising process.
The company signed contracts and secured partnerships with major insurance providers while holding discussions with institutional venture capital firms across the UK, Europe and the United States.
Two insurer partnerships are expected to become operational later in 2026. Fruga has also identified a pipeline of household insurance providers and MGAs that it intends to convert into live integrations.
By integrating directly with insurers and established financial services providers, Fruga can potentially make its rewards system available to large groups of existing customers without acquiring each policyholder individually.
The immediate commercial challenge is converting signed partnerships and the company’s wider pipeline into operational deployments while maintaining the technology and support required by insurance providers.
Investors target insurance retention and customer engagement
The investment from PXN Ventures and Haatch reflects a shared interest in Fruga’s potential to address customer retention within the insurance market.
Joe Ball, senior investment associate at PXN Ventures, said the relationship between insurers and policyholders has changed relatively little despite the size of the industry.
Insurance is a huge market, but the relationship between providers and their customers has remained largely unchanged for years. Most consumers only hear from their insurer when it’s time to renew, and price is often the deciding factor in whether they stay or switch.
Joe Ball, senior investment associate at PXN Ventures
Ball said Fruga’s founders had developed a commercially promising response to that problem.
“In response, Ross and Asaf have developed a proposition with clear commercial potential, and we’re looking forward to supporting them as they grow their team and bring the technology to more partners across the market.”
Haatch identified customer attrition and the limited availability of actionable customer information as related problems for insurers.
Marwa Ebrahim, associate at Haatch, said existing retention products often fail to generate sustained customer engagement.
Customer churn at renewal is a major problem across insurance, yet most existing retention tools do little to create meaningful engagement or actionable customer insight.
Marwa Ebrahim, associate at Haatch
The company’s approach seeks to address a recurring feature of personal insurance distribution: price comparison at renewal.
By allowing policyholders to accumulate financial benefits throughout the year, Fruga intends to introduce an additional consideration into renewal decisions beyond the quoted premium alone.
For insurers, the potential value extends to customer engagement and the ability to identify changing needs using transaction-derived information.
The model remains dependent on insurers adopting the technology and customers generating sufficient rewards to influence their decisions.
Northern Powerhouse Investment Fund II supports expansion
The financing includes investment from NPIF II – PXN Equity Finance, managed by PXN Ventures under the Northern Powerhouse Investment Fund II.
The fund supports business investment across the North of England, with Fruga’s funding intended to help expand its technology and commercial operations.
Sue Barnard, senior investment manager at the British Business Bank, said the investment would support the company’s development. “This investment from the Northern Powerhouse Investment Fund II will support Fruga as it scales its technology and builds on its growth ambitions.”
Barnard linked the financing to the wider objective of supporting technology businesses and regional economic growth.
“Innovative businesses that harness technology to improve products and services have an important role to play in strengthening the digital economy, as well as supporting the UK’s Modern Industrial Strategy to boost productivity and support high-growth businesses across the North. That’s why we’re committed to supporting scaleups across the North through NPIF II, providing the capital to drive forward UK-wide growth.”
The participation of NPIF II alongside Haatch provides Fruga with institutional backing as it moves beyond its initial self-funded development stage.
For an insurtech company at this stage, the financing is intended to support commercial execution, expand staffing capacity and establish the operating infrastructure needed for additional insurer partnerships.
Exchange accelerator helped Fruga progress from an early-stage product
Fruga’s funding agreement follows its participation in the Exchange accelerator programme at Campfield, a technology, media and creative workspace campus in Manchester’s St. John’s district.
The company joined Exchange in 2025 at minimum viable product stage, without customers, established market traction or external investment.
It initially participated in the programme’s Start-up Cohort before progressing to the Growth Cohort as its commercial proposition attracted greater interest.
Exchange provided investment-readiness support and helped Fruga expand its network of advisers, investors and financial services contacts.
The programme also facilitated a relationship with HSBC Innovation Banking, which supported founder Ross McCarthy through introductions, access to relevant networks and opportunities, banking services and assistance during the fundraising process.
Exchange is an independent accelerator serving early-stage and scaling companies across technology, media and creative industries.
Since its launch, the programme has supported more than 1,149 individuals across over 357 businesses.
Its alumni have collectively raised more than £85 mn in investment and created approximately 1,300 jobs in the Manchester region.
Fruga founder targets wider adoption by UK insurers
Ross McCarthy, founder and chief executive of Fruga, said the company had financed its development entirely through its founders’ capital before attracting institutional investment. Interest from major insurers created a need for additional staffing and operational resources to support larger commercial deployments.
Until now, we’ve built Fruga entirely with our own capital, but when major insurers started taking an interest, it became clear that we needed the team and greater resources behind us to deliver at that level.
“We already have a great product, and we’re seeing real demand for what we’re building from Campfield. This investment allows us to grow the team around it and take Fruga to a much bigger audience. Our ambition is for this to become an everyday part of how people save money on insurance, with the potential to reach millions of customers through the insurers we work with.”
McCarthy has also framed the business around changing how insurers maintain customer relationships, rather than treating retention primarily as a question of premium competitiveness.
Insurers hold some of the biggest customer bases in the country, yet the industry has trained those customers to see their policy as a price and nothing more. Every renewal sends them back to the comparison sites, and the insurer that wins them this year loses them the next. We started Fruga to take customers out of that aggregator cycle and put real value back at the heart of the relationship. Customer value and data insights is what makes that possible.
He sees open banking as a means for insurers to gain a more continuous understanding of their customers and reward them beyond the annual renewal process.
“With open banking, an insurer can understand its customers better than anyone else: what’s changing in their lives, what they need next, and how to reward them every day, not just at renewal. That turns renewal from a price check into a reason to stay.”
The longer-term objective is to establish Fruga as a technology and data provider supporting customer intelligence and retention across the UK insurance industry.
Recruitment and insurer integrations planned for 2027
The £1 mn funding round will allow Fruga to expand its operational capacity as additional insurance partnerships move toward implementation.
The company is prioritising product and engineering recruitment, with hires planned for the first quarter of 2027, alongside further development of its existing platform.
It also intends to expand customer adoption and deepen the use of open banking technology within insurance distribution and retention.
For insurance providers, Fruga’s model offers a potential alternative to customer relationships centred largely on annual renewals, claims and premium comparisons.
The proposition depends on whether spending-linked credits provide sufficient value to influence policyholder behaviour and whether transaction information helps insurers identify relevant customer needs.
The involvement of PXN Ventures and Haatch gives Fruga financial backing to test that proposition across a larger commercial base.
Its next stage of growth will be measured by the implementation of insurer partnerships, customer adoption of the rewards system and the ability to turn open banking data into measurable benefits for insurers and policyholders.
