The Finance Durham fund, established by Durham County Council and managed by Maven Capital Partners (“Maven”), one of the UK’s most active private equity firms, has helped raise £850,000, providing £150,000 of the total investment in innovative technology start-up, Honcho Markets Ltd (“honcho”), with CrowdCube investors providing the remaining £700,000. Funds raised will be used to complete the final build of the software and launch the product later in 2018, creating three new jobs based in Durham.
honcho’s software is an innovative alternative to price comparison websites (PCWs), and aims to disrupt the market by providing consumers with a new way to buy insurance products reducing the cost of insurance for motorists. Through honcho’s m-Commerce reverse auction marketplace, insurance companies transparently bid for the business of consumers, which ensures that a highly competitive quote is offered at all times, putting the customers’ interests at the centre of the transaction.
The UK consumer insurance industry is the largest in Europe and the third largest in the world, with 911 authorised general insurance companies in the UK alone. The market is currently dominated by PCWs which are increasingly being scrutinised for a lack of transparency.
Founded in 2014, honcho sought to raise £650,000 to fund its app, initially through CrowdCube. With the support of the Finance Durham Fund, managed by Maven, honcho closed the investment window nine days early following the exceptional support it had received. The campaign was overfunded to a capped limit of £850,000 from 713 CrowdCube investors.
honcho’s management team has significant experience in the industry, CEO Gavin Sewell has over 20 years’ experience in banking and finance and has also previously scaled and successfully exited his own FinTech start up. Commercial Director, Frank Speight, is highly experienced in financial services having previously worked in both banking and insurance for blue chip organisations. The business also has a strong board, with former CEOs and directors of KPMG, comparethemarket.com, Northern Rock PLC and BT Global Services all advising the management team.
Now headquartered in Salvus House, Business Durham’s flagship office space at Aykley Heads, Honcho is now resident in the thriving business community in Durham. Crowned one of the UK’s most innovative cities last month, Durham is home to a growing hub of dynamic technology businesses. The relocation of honcho to the County to develop and operate their app will add to Durham’s existing network of ambitious, high-growth companies.
The investment in honcho is the fifth deal from the £20 million Fund established with funding from Durham County Council and overseen by Business Durham, the economic development organisation for County Durham. The Fund is managed by Maven Capital Partners, one of the UK’s most active private equity houses and SME finance providers, to support the growth of high potential businesses located in, or looking to relocate to the County. Maven provides flexible funding packages tailored to SMEs’ growth requirements, and opened offices in both Newcastle and Durham last year to support regional businesses.
Alex Marsh, Investment Manager at Maven, said, “honcho is a hugely exciting new business and we are delighted to support its plans to launch such an innovative app for motorists that empowers the consumer and ultimately reduces the cost of insurance. The team has identified a clear gap in the market and the overwhelming response from the crowd demonstrates that there’s a real appetite for the technology they’ve developed.
Gavin Sewell, CEO of honcho said “We are absolutely delighted to have received such a fantastic level of support from the crowd as well as Business Durham and Maven and to have exceeded our funding target by more than 25%. honcho will be a truly disruptive force in the marketplace; putting consumers’ first, encouraging competition and transparency, and saving them time and money.”
Cllr Carl Marshall, Durham County Council’s Cabinet member for economic regeneration, said: “We’re delighted to be helping another business through our Finance Durham Fund. honcho will be a really innovative app and the fact it has raised so much money through crowdfunding is testament to people’s confidence in it as a company.”