Insurtech Hometree raises £7m on the back of surge in demand
& new partnership launches through COVID-19
- Hometree, the home services & insurance start-up has raised a £7m funding round following a significant growth spurt for the four-year-old company
- Demand for Hometree’s boiler & home cover plans has accelerated rapidly since the start of lockdown as homeowners became more concerned about home emergencies and Hometree’s tech-enabled model meant it could continue to provide its services
- The company expects to grow significantly over the coming months as it announces exclusive partnerships with leading challenger energy providers Good Energy, Pure Planet and So Energy, and because the FCA’s recent clampdown on insurers so-called “loyalty penalty” benefits its highly transparent business model
London based Insurtech Hometree has raised £7m in a funding round led by global investment firm Anthemis, and existing investors DN Capital and Literacy Capital – the fund led by ex. Capita CEO Paul Pindar. Silicon Valley Bank also participated in the round alongside Gumtree Founder Michael Pennington & many of Hometree’s existing shareholders.
The funding round comes on the back of a significant growth spurt for the start-up – which originally started in the home heating market, but has since expanded into the Home Cover or Home Emergency Insurance market – pitting them up against industry giants British Gas & HomeServe.
Growth for the company has accelerated since the start of lockdown in March where most of the UK population observed shelter in place orders, and the demand for home emergency products increased. The company now expects Y-on-Y growth in 2020 to be greater than 300%. Despite millions of homeowners managing financial uncertainty brought on by COVID-19, the fear of breakdowns at home has kept the Home Cover market in strong demand, and the resilience of Hometree’s value proposition and customer centricity meant they saw very little customers cancelling their direct debit.
The company continued trading throughout lockdown as their workforce was able to seamlessly transition to work from home, and their engineers were deemed to be providing essential services, meaning they were able to attend home emergencies – whilst ensuring all necessary precautions to avoid coming into close contact with a homeowner.
As a highly tech-enabled company, Hometree is leading the transition of the home services industry to a digitally-led one – where consumers will increasingly be able to expect the same level of service they routinely experience from leading tech companies such as Ocado or Deliveroo. For Hometree, the future for the industry is harnessing the power of the Internet-of-Things and smart home hardware to move a reactive customer experience into a proactive one, where more tech-enabled providers such as Hometree are able to inform the customer that something has broken down, and perhaps even prevent the fault occurring in the first place.
The funding comes at an exciting time for the business, which expects to see significant growth in the months ahead on the back of recent regulatory changes and tie-up’s with challenger energy suppliers –
- Regulatory Changes – There has been a surge in demand for alternative providers to British Gas & HomeServe as homeowners have become less tolerant of significant year on year price hikes – the so-called loyalty penalty, which the FCA has sought to stamp out as outlined in their report on “general insurance pricing practices” released in late September. Following this report, Hometree believes it’s “No Claims, No Price Hikes” promise positions the company very well for future growth as the industries most transparent and trusted provider.
- Partnerships with Challenger Energy Suppliers – The company also recently announced exclusive partnerships with leading challenger energy suppliers Good Energy, Pure Planet and So Energy, offering their customers access to a suite of home cover policies. Although challenger suppliers such as these have taken significant market share from the Big 6 energy suppliers over the last 5 years, many customers still struggle to leave the incumbents, as they have become used to having a home cover product or boiler servicing included in their energy tariff. By offering homeowners a genuine alternative to the Big 6’s offerings, Hometree is confident it can assist the challenger suppliers with the goal of making the energy market fairer for all customers.
Hometree Founder & CEO Simon Phelan said,
“Our objective in the next 2-3 years is to become the leading challenger brand in the Home Cover market. This new funding will help us accelerate our plans at a time when homeowners across the UK need peace of mind more than ever. We are incredibly excited to be able to help homeowners have one less worry at this incredibly stressful time in all of our lives.”
Anthemis’ partner Ruth Foxe Blader, who will join the board said,
“Hometree occupies an important position at the intersection of Insurtech and Proptech. Its Home Cover product is a great example of what we call Embedded Finance, where, more and more, we see financial propositions becoming an invisible but critical part of the services that power our lives, rather than a product being consumed independently. Hometree integrates a financial service, an insurance product, with an increasingly connected home, work-force and consumer. The tech-based efficiencies and high-quality care Hometree offers customers are endemic of where the industry is going.”
Hometree exists to offer homeowners unparalleled peace of mind & control in the running of their home, letting them focus on the things that really matter. We believe everyone deserves to live in a home that actually feels like a home.
As the highest rated provider of Home Services in the UK – Hometree offers homeowners across the country a range of policies that cover breakdowns and repairs to the critical infrastructure in their home – heating, electrics, plumbing, drainage and gas fires. Homeowners & landlords sign up for a monthly subscription contract, and if they have any home emergencies, one of Hometree’s 1000+ nationally based engineers will be dispatched to solve the problem.