Covera Technologies Inc., a Montreal-based insurtech startup that uses technology to find its customers “optimal insurance rates every year,” has raised $1 million as part of its seed financing round led by Ferst Capital Partners, with participation from fintech “angel investors.”
The seed round, which was preceded by a $500,000 pre-seed financing round in 2016, brings the total capital raised by Covera to $1.5 million, said the company, which reports that its goal is “to make automatic insurance renewals a thing of the past.”
“No one should be allowing their insurance to automatically renew – there are almost always benefits to shopping around,” Scott Loong, CEO of Covera, said in a press release on Tuesday. “Covera provides everyday Canadians with a non-conflicted and technology-first approach to improving their mobility in the market – gone are the days where Canadians are trapped by the boring process of shopping. Covera handles it for you, year-after-year, and gets you the best value in the market when your home or auto insurance expires.”
The insurtech startup raised $500,000 at the ideation stage from Ferst Capital Partners, also of Montreal, in January 2016. It raised an additional $1 million in September 2017 and expects subsequent closings to bring the total amount raised to $2 million by November, Covera said in the release.
“There is an enormous opportunity for disruption in P&C insurance distribution and Covera is innovating by effectively leveraging data and AI to gain insights,” reported Dominique Ferst, managing partner at Ferst Capital Partners. “Covera is using a unique go-to-market strategy by targeting the insurance renewals space. Ferst Capital Partners is proud to be leading this investment in an industry that has gained global traction whereby Canada has lagged behind.”
Covera’s co-founders Paul O’Reilly (left) and Scott Loong. Credit: Covera.
The new financing will be used by Covera in three key areas: to support growth and user acquisition initiatives; drive geographic expansion Canada-wide; and build the team in order to accelerate product development.
The insurtech startup said in the release that 80% of Canadians allow their insurance to automatically renew when it expires. “The insurance renewal process is frustrating and time consuming so few Canadians bother,” the release said. “The result is that millions of Canadians are under protected or are paying too much. Covera breaks customers out of this cycle by automatically shopping for your home and auto insurance, year-after-year. Customers sign up in minutes and when their current insurance expires, Covera uses data and proprietary algorithms to find insurance alternatives that can be purchased in just a few clicks.”
For its part, Ferst Capital Partners is an investment firm that provides strategic capital and support to fintech startups. “As a startup studio, we support the next generation of emerging fintech entrepreneurs who are working hard to improve the financial lives of all Canadians,” the firm said in the release.