The UK’s largest provider of pay-as-you-go motor insurance, Tempcover, has been bought out by its bosses for £13.3m.
The deal, which included a £7.5m growth investment from Connection Capital and a £5.75m debt package from Santander, is set to fund Tempcover’s expansion into new markets.
It currently focuses on short-term cover for drivers, in a market which it believes is growing due to the gig economy, the removal of third-party cover in car insurance policies and the evolution of more flexible vehicle-sharing models. Writing more than 360,000 policies last year, Tempcover is estimated to have a 60 per cent market share in its niche.
"We have exciting plans to grow the business significantly, which will see us develop our capability into existing and new areas of temporary insurance," said Alan Inskip, the business's chief executive.
Connection Capital partner Miles Otway added: "Tempcover is a market leader and has won many accolades for its innovation and its service – and with good reason. It’s a dynamic pioneer in its niche with real ambition and capacity to capitalise on growth opportunities."
As well as providing growth capital, the firm has also introduced Peter Barrett as a new non-executive chairman and Christian Young as a non-executive director.
Connection Capital has previously invested in names ranging from Virgin Wines and Wagamama to Travis Perkins and Premier Inn.