A fintech startup offering motorists flexible pay-as-you-go insurance by the hour has landed new investment from one of the UK's top venture capitalists.
London-based Cuvva has landed £1.5m seed capital from Robin Klein's LocalGlobal, a backer of Zoopla and Citmapper, to target urban drivers who use their cars infrequently and tapping into the same habits which drive consumers to use on-demand services such as Uber.
Cuvva will also launch an innovative new insurance product on top of the original pay-as-you-go concept, with customers offered a monthly subscription which it claims could save drivers up to £1,500 each year. They will then pay just £1.20 per hour when they're using their car and also earn a no claims discount.
Founder Freddy Macnamara said it was unfair that the estimated 6m people who don't use their car very often are getting an unfair deal.
"It was ridiculous that I couldn’t borrow a car for an hour, because of the difficulty of getting short-term cover. I could order an Uber or a Deliveroo to my house, but I couldn’t buy insurance for a short period quickly," he said.
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LocalGlobe general partner Ophelia Brown said: “Pay-as-you-go insurance is a long overdue product in the UK, where increasingly the trend is for drivers to use their cars less and less. It’s crazy that people’s premiums haven’t and can’t change to reflect that. Cuvva understands that, just as consumers expect price transparency and flexibility with all other financial services, they should also get that with their insurance."
Since launching at the end of 2015 Cuvva, reinsured by Swiss-Re, has covered 130,000 hours of driving. It brings total funding for the startup to £2m with previous backers including Barclays' Techstars accelerator. Seedcamp, and Nutmeg founder Nick Hungerford.