Cover Genius, a US-based InsurTech company founded by former Australian travel industry entrepreneurs Angus McDonald and Chris Bayley, has recently made headlines with its successful Series E funding round. The company secured an impressive $80 million USD ($119.2 million AUD), led by new investor Spark Capital, with participation from existing investors Dawn Capital, King River Capital, and G Squared.
This round, which comes on the heels of a year of triple-digit revenue growth, brings the total capital raised by the company to $150 million USD ($223.6 million AUD), leading Bloomberg to recognize it as a unicorn in 2021 with a valuation of $1 billion USD ($1.5 billion AUD).
The funding follows a remarkable year for Cover Genius, which saw a 107 percent increase in revenue in 2023. The company, which provides embedded insurance solutions, has expanded to over 550 employees globally and registers approximately two million customers each month, reflecting an 80 percent growth rate in its customer base.
Established in 2014, Cover Genius stands out by enabling businesses to offer insurance products as an add-on at the point of sale. This innovative approach, coupled with the leadership of McDonald, a University of Technology Sydney graduate in mathematics and engineering, and Bayley, a former political reporter and an early Google Sydney team member, led to their pivot from their initial online travel business to focus on InsurTech. Their decision was driven by the challenges they encountered in distributing insurance across multiple regions, a problem they aimed to solve with technology.
“Chris and I saw firsthand the difficulties of distributing insurance across various regions and identified an opportunity to enhance the industry with technology,” said McDonald, CEO of Cover Genius. “Traditional insurance models were slow and frustrating for customers. We aimed to create a more efficient, customer-friendly insurance experience.”
Cover Genius partners with major digital businesses like Uber, Ryanair, and eBay to provide embedded insurance to over 30 million customers worldwide. Their primary product, the XCover platform, is licensed in more than 60 countries and offers a seamless end-to-end insurance experience.
The new funding will be utilized to invest in advanced technology, including improved digital insurance distribution solutions, AI-driven claims handling, and an expansion of the platform’s protection solutions. “Our investors’ confidence underscores the resilience of our embedded business model and its growth potential, especially as we focus on key markets like travel, retail, ticketing, and logistics,” McDonald noted.
James Kuklinski, general partner at Spark Capital, commented, “Cover Genius’ technology platform, global presence, and digital claims focus initially caught our attention. The company has become a leader by addressing common insurance issues such as limited market coverage, lengthy claims processes, and lack of product diversity. We are thrilled to support them as they continue to deliver value to partners and a superior consumer experience.”
McDonald expressed that the closure of the Series E funding round marks a significant milestone for Cover Genius. “We have grown from a small startup to a leading InsurTech company,” he said. “Despite the tech funding slowdown, this round, led by Spark Capital and supported by our existing investors, highlights the strength of our embedded business model and our growth potential.”
Spark Capital’s investment is particularly noteworthy as the venture capitalist has previously backed successful companies like Twitter, Coinbase and Slack.
