Insurtech PremFina raises $36m
UK insurtech firm PremFina said on Oct. 4 that it raised $36 million in equity funding and a debt facility.
PremFina is a premium finance company. It funds the upfront payment of an insurance premium to an insurer, on behalf of an insured party. PremFina then collects the same amount via monthly instalments, along with a finance fee, from the insured party.
“Premium financing is an industry that’s been crying out for innovation,” said Bundeep Singh Rangar, CEO and founder of PremFina. “The incumbents have remained largely unchallenged due to age-old barriers to entry, such as the lack of funding for insurance start-ups, costs and time of regulatory compliance and significant investment in technological capability needed to meaningfully enter the market. Consequently, insurtech has lagged behind other areas of fintech in terms of innovation. PremFina has overcome these barriers and is now poised for growth,” Rangar added.
Rakuten Capital, the investment arm of Japan’s e-commerce and fintech services provider Rakuten, and the UK’s Draper Esprit led the financing round. They were joined by global investors Thomvest Ventures, Emery Capital, Rubicon Venture Capital, Talis Capital and the company’s founder.
The equity portion of the financing round was more than three times oversubscribed, the company said.
“The participation of outstanding investors from Toronto to Tokyo in our oversubscribed round highlights the vast opportunity ahead for PremFina,” said Rangar, who invested in 17 percent of the equity portion alongside the institutional investors. “Our new investors bring great strategic value and priceless global financial relationships.”
The investment will be used to accelerate PremFina’s UK operations to meet a high demand for its white-label premium financing solution among insurance brokers and support international expansion, the company said. Its white label software-as-a-service offering improves brokers’ efficiency, profitability and customer relationships, according to the company.
“Rakuten sees outstanding growth potential in PremFina’s business model of promoting insurance inclusion and providing access to affordable insurance,” said Oskar Mielczarek de la Miel, managing partner at Rakuten Capital. “We are excited to support the growth of PremFina’s innovative business in the UK and internationally.”
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