Insurtech startup Handdii has raised $1.5 million in seed funding, from Scale Investors and Greenlight Re Innovations, for tech bringing property insurance claims into the 21st century.
The Melbourne-based startup was founded by Kathryn Wood, the former head of claims at a large insurance company, and Christie Downs, who was the director of a building company.
Through their respective work, the co-founders noted a disconnect in the way property insurance claims were managed.
They also noticed about 80% of claims are relatively simple, valued at under $10,000, and requiring three or fewer contractors to complete the work.
Downs and Wood created a product designed to connect the insurance company, the customer and the tradies, allowing for better, quicker communication and the faster completion of work.
“It makes it all streamlined and brings it to the modern era,” Downs tells StartupSmart.
This disconnect in property insurance claims has been in the industry “forever”, she adds.
And while it was daunting for the founders to leave secure jobs to tackle it, they came to the conclusion no-one else was going to do anything about it.
“The only people that understand it are other players in the industry, but they are not independent of their current offering.
“They have a competing interest. That independence is really necessary,” she explains.
Handdii secured initial backing from Deasil Management, and later, about the time of the royal commission, received a commercialisation grant.
“It was all about the lack of transparency in the industry.
“Particularly in property claims, nobody knows what’s going on,” Downs explains.
Handdii “creates a whole lot of transparency”, she adds.
Over the past 18 months, the co-founders have been building the team and refining the product.
They’ve also expanded into Adelaide and Sydney, and will go live in Auckland later this month. The co-founders expect to be in the US later this year.
This seed funding will allow Handdii to further expand overseas, and it’s also pegged for creating new functionalities within the technology.
However, the funding will also go towards “just growing an awesome team”, Downs says.
The startup will be building up its development and contractor engagement teams, as well as investing in insurance company account management.
The co-founders intend for the team to stay relatively small, “but people we choose need to be of a really high calibre”, she adds.
“We’re all about momentum and positive attitude and really playing to people’s strengths.”
When seeking the funding, Downs and Wood deliberately approached woman-focused angel group Scale Investors.
“It’s difficult to find female investors,” Wood notes.
Going through Scale meant the founders were able to get another woman on their board, “which is important for us,” she adds.
“We’re in a position to be able to positively affect change … in regards to gender equality and inclusiveness.
“We are in construction, we are in tech and we are in insurance. We are in heavily male-dominated areas.
“So, where we can, we’re trying to work on that,” she explains.
It was also about finding strategic investors and surrounding themselves with good partners. Greenlight Re is a specialist property reinsurance company, with relationships with many US insurance firms.
“Obviously that’s really important for the future growth of Handdii and our client base,” Downs says.
With Scale, it was more about securing a syndicate of people with different skills sets to the founders’ own.
“There will be someone with marketing skills, someone with financial skills, someone with risk skills,” Downs says.
“We can draw on those from an advisory perspective.”
“Nobody knows insurance”
For other founders looking for early-stage or angel investment, Downs says it’s important to set your expectations straight before you get started.
It will likely take a lot of meetings, she says.
“You need to think it’s going to take meeting 20 different VCs or private equity investors to be able to secure the right one,” she explains.
“Then, if it takes less, then great.”
While some people secure investment after meeting just one or two pitches, “I don’t think that’s realistic”, she adds.
And this is particularly true when you’re in a niche industry such as insurance.
“Nobody knows insurance,” Downs notes, and investors are often less inclined to put their money into an area they don’t know well, or can’t assist with.
Downs advises founders to have a positive attitude and to maintain that energy. People will tell you it’s difficult, and you should listen to them.
“It’s not supposed to be for the fainthearted,” she says.
“You know it’s going to be hard, so set your resilience and your resolve to get yourself through that.”