Honey Insurance raises $108m led by US investor Gallatin Point Capital

The investment builds on Gallatin Point Capital’s extensive portfolio of insurance investments, with the group’s sole focus on “opportunistic investments” in financial institutions, services and assets. It also presents a lower entry point into the Australian insurance market for the US group, which has US$5 billion ($7.7 billion) in funds under management.

“The bar for us to enter a new market like Australia was very high, but the quality of the founding team, impressive growth, and innovative customer solutions that Honey brings to the table was a compelling combination,” says Lance Toler, the managing director of Gallatin Point Capital.

“We came to the conclusion that a genuine challenger like Honey Insurance is well overdue in the Australian homeowners insurance industry, and we are excited to be supporting their journey.”

Founded in 2020 by US entrepreneur Richard Joffe, who is also co-founder of US-based Park Assist and Stella.ai, Honey Insurance is a digital home-insurance provider that provides consumers quick access to insurance cover by using public house information, satellite data and artificial intelligence to estimate rebuild costs.

Joffe says the Series A capital raise will give Honey Insurance “the firepower required over the next 18 months to triple revenues, turn profitable and double headcount to over 200 people”.

“The funding will allow us to further invest in our award-winning product design by making Honey a truly seamless experience from purchase to claim,” he says.

“The calibre of our investors underscores the unique opportunity we have to transform the Australian market, which for too long has been uncompetitive and lacking in innovation.”

Honey’s technology-led services are said to eliminate the estimated 50 per cent of avoidable accidents that happen to homes, with one of the initiatives for customers being a complimentary smart home sensor kit to monitor risks such as fire, water leaks, and intrusion.

“As a tech-enabled insurance company, we are customer-obsessed, which has led to a Net Promoter Score of 92 which is the highest in Australia, and stems from our desire to ‘wow’ customers with every engagement,” says Angelo Azar, Honey’s chief operating officer.

“In fact, we were recently named as the sixth-fastest-growing technology company in Australia, which is quite an achievement for a company that was only launched in June 2021 with fewer than 20 employees.”

Honey Insurance is chaired by former Foxtel and News Corporation CEO Peter Tonagh who notes that Australia’s insurance industry has “one of the lowest levels of investment into innovation relative to revenues in the world”.

“We are out to change that,” says Tonagh. “We are leveraging some of the most innovative technology and data platforms globally to better protect the most valuable asset of most Australians – their homes.”

Joffe says that Honey Insurance’s growth since inception has been supported by a strategic relationship with RACQ, and its CEO David Carter.

“They have stood by us through all the bumps in the road, and their flexibility and long-term commitment is an example of how startups and incumbents can drive industry-wide change,” he says.

“Honey’s approach to fair and consistent pricing, along with its simple product design, has led to 15 exclusive partnerships over the past two years, and we are so grateful to our partners for their on-going support such as Bank of Queensland, Harvey Norman, AGL, ACN, Finsure, SFG, ABN, McGrath and Metricon.”

RACQ is Honey Insurance’s underwriting partner and along with PEXA, Metricon, ABN Group, Mirvac, AGL, SFG, REI and Apex Capital, it was among the early investors in Honey Capital by participating in the company’s $15.5 million seed round.

Honey Insurance’s $108 million Series A compares with last year’s hefty $120 million Series A by Canberra-based space services company Skykraft and, prior to that, Judo Capital Holdings' (ASX: JDO) $120 million raise in 2018, prior to listing in 2021, which at the time was described as Australia's largest ever pre-revenue capital raising.