Australian insurtech Honey Insurance raised $108 mn in Series A

Australian insurtech startup Honey Insurance, has raised $108 mn in its Series A funding round, attracting significant interest from investors in the U.S.

Honey Insurance is committed to providing more than just insurance; it’s about delivering peace of mind through advanced AI-technology.

The startup operates through an underwriting relationship with Australian insurer RACQ, offering comprehensive home, renters, and landlord insurance.

What sets Honey apart is its unique approach to insurance – customers are equipped with three smart home sensors designed to monitor various home aspects, enabling proactive prevention against potential mishaps.

Australian insurtech Honey Insurance raised $108 mn in Series A

Founded by entrepreneur Richard Joffe, known for his involvement with US-based ventures Park Assist and Stella, Honey Insurance made its debut in 2021 (see InsurTech Unicorn Startups List).

The company made waves early on by raising an impressive $15.5 mn in a Seed round, led by underwriting partner RACQ and supported by various institutional investors including AGL, Metricon, Mirvac, and PEXA.

The latest Series A funding was spearheaded by Gallatin Point Capital, marking the investment firm’s first foray into the Australian market. Based in Greenwich, Connecticut, Gallatin Point Capital has a track record of backing emerging insurance ventures.

The firm injected $1.25 bn into Trusted Resource Underwriters Exchange in a partnership with American Family Insurance Group late last year.

The Australian insurance industry, valued at approximately $10 bn, faces ongoing challenges, particularly in the realm of homeowner insurance.

Australian insurtech Honey Insurance raised $108 mn in Series A

Honey Insurance formed a strategic collaboration with ASX-listed digital property exchange platform PEXA two years ago, enabling the distribution of its insurance products through the PEXA Key app.

With this substantial Series A funding, Honey Insurance joins the ranks of Australian startups securing significant investment rounds.

Notable examples include Wollongong BNPL unicorn Scalapay’s $210 mn raise in 2021 and Canberra-based air traffic management startup Skykraft’s $120 mn round in 2023.

Honey Insurance has rapidly captured approximately 1% of the Australian home insurance market. The startup distinguishes itself by offering what it terms “smart” insurance, leveraging Honey-branded sensors developed by US-based tech startup Notion.

These sensors are designed to detect common issues leading to insurance claims, such as water leaks, open doors and windows, temperature fluctuations, and activated smoke alarms.

To incentivize adoption, Honey Insurance provides the sensor kit free of charge along with premium discounts.

Amidst premium increases of 40% or more over the past 18 months, attributed to losses in the sector following a series of natural disasters, Honey’s innovative approach has garnered attention.

Honey Insurance’s philosophy is simple yet profound: Australian homeowners deserve better, safer, and more intelligent insurance solutions.

By integrating smart technology into its services, the company is not just insuring properties; it’s actively contributing to making homes safer every day.

This commitment is underscored by a significant investment of $250 in safety for each customer from the outset, providing smart sensors that can preemptively alert homeowners to potential dangers such as fire, water damage, and theft.

Customers who reduce their risk through the use of smart sensors enjoy lower premiums, with up to an 8% discount annually. This is part of Honey’s broader mission to make insurance a rewarding experience, not just a contractual necessity.

Peter Sonner   by Peter Sonner