Going behind the scenes of a successful insurance fundraise

What goes on behind the scenes of a successful fundraise in the insurance ecosystem? Lending their insights from both an investor and investee perspective, insurance industry stalwart Neil Utley and MD of Percayso Inform Rich Tomlinson (pictured) each emphasised the blend of timing, trust and opportunity it takes to form a successful funding partnership.

Utley recently led a second major investment into Percayso alongside the insurance data provider’s venture capital investor Praetura Ventures, securing £2.7 million in funding. Contextualising the current environment, Utley highlighted the number of businesses that are failing to secure funding and how Percayso is not just bucking this trend but subverting it by commanding investment either from existing investors looking to invest again or people like himself who have been in the industry for decades.

“I’ve been in this market for donkeys’ years and I partly exited into semi-retirement about eight years ago after listing Hastings but I still kept an active interest,” he said. “Either by keeping up with the Press or through my friends in the market, I am always looking at opportunities. I believe the insurance market in the UK is probably the most disparate but competitive market in the world.

“And there’s always people wanting to start new ventures or expand existing ventures. So, there are always opportunities coming across your desk for funding and support. And to be honest, most of them don’t really have great potential or they’re in a very crowded market where you don’t really see anything different.”

Utley noted that he looks for three key factors in any prospective opportunity – that the people running it know what they’re doing, that he feels he can work with them and trust them, and that he believes their product(s) will make a difference. With Percayso, he said, the team at the top are very well-regarded and respected across the industry and they have a strong track record in creating market-leading propositions and products that stand out as new and innovative.

“Rich and Simon [James, Percayso founder] know the market from having built a successful, market-leading business before,” he said. “But they’ve created [Percayso] from scratch, from the ground up – starting with the Cloud and going down into the bespoke databases and creating something that’s flexible for all brokers, MGAs and software houses to easily integrate into.

“It’s a mixture for me of the team, the space, the opportunity and the product all being fantastic. I’ve seen the team do it before, so it wasn’t a difficult decision. Having turned down virtually everything else I’ve seen, it’s unusual for me to be so excited by an opportunity but I think this is very different.”

It’s not the first external funding raise round Percayso has been part of with the firm commanding a £3.4 million investment led by Praetura Ventures in February 2022. That was a big step for the firm and allowed it to gain a lot more traction in the market, Tomlinson said. In the intervening period, Percayso acquired the automotive data insight platform Cazana – a move which opened it up to a much bigger and broader client base and expanded its product proposition and internal capabilities. 

“But it also opened our eyes to the inherent opportunities and additional potential in the market,” he said. “It made us even more ambitious and gave us the platform for further expansion over the coming years.”

Percayso’s high-profile acquisition of Cazana as well as the expansion of its proposition to deliver a full quote intelligence suite has certainly made it quicker and somewhat easier for the firm to foster the relationships it has across the entire market. However, Utley highlighted that these have served as “acceleration” rather than a redefinition of the firm’s tried and tested growth strategy.

With an eye to where Percayso goes next with this new investment to its name, Tomlinson shared that there are a variety of growth plans on the agenda.

“We’re planning a lot of new product development,” he said. “There’s a lot of new areas that we’re looking to get into. Having all that ex-Cazana data in-house with our Percayso Vehicle Intelligence offering has sparked a lot of new product development ideas around where we could take that next.

“Equally we’re looking at our core platform and the amount of data we’re collecting on a daily basis now with 10s of millions of quotes and policies [feeding in] huge amounts of information about vehicles and individuals. That just leads to more and more opportunities to create new products out of that for things like verification, fraud detection, and understanding your policyholders and customers as an insurer.”

New product development is a core area of focus, he said, but that doesn’t mean that Percayso will be taking the eye off the ball when it comes to its existing platform. Making sure that core platform continues to be resilient and high performing is essential because customers rightfully expect a lot from Percayso as a partner in terms of how it supports them.

“We’re very proud that we’ve had 100% uptime, bearing in mind the amount of transactions we’re doing, and the resilience we need for that kind of capability,” he said. “There’s never been any outage or downtime. We’re pretty proud of that and obviously we want that to continue so we need to continue to invest in the platform so there’s lots of plans there.”

Having access to Utley’s 30-plus years of insurance expertise will also be “hugely invaluable”, Tomlinson said, and he noted that he’s already received affirmation from the market of the natural fit represented by the partnership.

“My role is to help where they need it,” Utley said. “I don’t pretend to be an expert on what Percayso are doing, they’re the experts on what they do. What I can do is be a sounding board for ideas and ask pertinent questions on monthly board packs and help Simon on structuring things and things like that.

“But I’m not interferer of good businesses. I’ll help them with the issues that they will inevitably have at various times, because I will have probably been in a similar place before at some time or another. My role is very much as a helper and a coach, doing whatever I can to help while not interfering in the business plan. They’ve got a very strong strategy and plan, and I’ll just be helping them put it into place.”

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