A North East company that aimed to become the UK’s number one online reverse-auction marketplace for insurance has ceased trading.
Durham-based Honcho first launched plans for its website eight years ago, setting out to disrupt the market through its app and website. The business operated a reverse auction site, where insurers could bid for drivers’ insurance contracts, with an app that allows insurers to bid for consumers’ business and compete with each other to offer the best value package in real time.
The tech firm, co-founded by Gavin Sewell and Frank Speight, launched with a number of van insurance providers and also had 25 car insurance providers on its platform.
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Over the years its growth plans were driven by more than £3m in investment through a range of sources, including grant funding, angel investors, crowdfunding and venture capital investments. Now however, the firm has ceased trading and it is understood directors have engaged a London firm to manage a liquidation process, after efforts to seek a buyer for the business, including its software and intellectual property, failed to serve up a potential new owner.
The business, incorporated in 2014, started out in Milburn House, Newcastle, but moved to Salvus House in Aykley Heads, Durham, after receiving investment from the Finance Durham Fund, managed by Maven Capital Partners, which stipulated it must be based in Durham.
Its first major £830,000 funding round closed in March 2018, with support from crowd investors on Crowdcube plus Maven Capital Partners. The following year it closed a first £750,000 phase of its superseed round with Maven, while soft-launching its iOS, Android and web apps.
One of its Crowdcube fundraises included a single investment of £250,000. In the Spring of 2020 it secured £1.2m from Maven investment, including new investment from specialist VC Insurtech Gateway, alongside crowd investors, and at the time the company said it had more than 350 investors.
Later that year it then turned to the Seedrs crowdfunding platform, and by July 8 2020 it had secured pledges totalling £1.431m from 571 investors – 117% of its £1.2m target.
In a short message on Honcho’s website, the company says: “After 3 years of trading and 5 years in the making we’re unfortunately packing up Honcho’s reverse-auction marketplace and placing it into retirement.
“Why you ask? Well, in truth, we’ve found it difficult to acquire customers in a highly competitive space and the economics mean it’s costing more money to run things than we’re making from selling policies.
“We’d like to say a huge thanks to those that have supported us from start to end, without your help we’d have never got things off the ground, so we’re extremely grateful. Hopefully we’ll cross paths again but for now it’s goodbye.”
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