In September 2012 BetaKit covered auto insurance comparison tool CoverHound, a San Francisco startup that at the time announced a strategic partnership with Source Interlink Media, which publishes Automobile Magazine and Motor Trend magazine, and also included a strategic investment. This week the company is announcing its Series A funding, a total of $4.5 million led by New York City’s RRE Ventures with participation from Bullpen Capital and existing investor Blumberg Capital, which provided $750,000 of seed funding in 2011.
The company was founded in 2010, was part of the AngelPad startup accelerator, and launched in May 2012 with the goal of helping drivers search for insurance online, compare quotes, and actually purchase policies directly through CoverHound. Rather than just directing drivers to third-party insurance brokers, CoverHound is a licensed independent agency, so their agents can sell policies from partner insurance providers including Progressive and Safeco Insurance.
CoverHound founder Basil Enan said in an interview that the funding will be used to build out the site’s comparison engine, and to hire additional staff. “We’ve got a huge backlog of projects that we’re excited about so more engineers and folks on the product team and we now have the resources to start building more awareness and will be staffing up our marketing team,” he said.
Today the company also announced that it now manages $1 million worth of premiums. Drivers can either browse directly on CoverHound’s site, or via CoverHound widgets on partner publications’ websites, including Source Interlink’s Automotive.com, MotorTrend.com, and Automobilemag.com. Enan said next they’ll be debuting a CoverHound-powered MotorTrend insurance center, the first of several planned CoverHound information centers on partner websites. MotorTrend will also be using CoverHound’s insurance estimate API, which they released in 2012 to help visitors on partner sites get initial insurance estimates, with the ability to visit CoverHound to get a more complete estimate.
In September Enan said Source Interlink was just one of several partnerships the company was hoping to make in the financial and automotive industries, though since then no others have been announced. “Partnerships continue to be a big part of our acquisition strategy in 2013 and we’ve built out some really cool technology to support those,” Enan said. “We have a lot of partnerships in the works with others in the automotive, real estate, and personal financial management verticals.”
As noted previously, CoverHound has to compete with sites like Comparethemarket.com, though that site is only available abroad, while CoverHound is available in 46 U.S. states and D.C. In the next few months the company will be expanding to all 50 U.S. states, and as for what else is next, Enan said they’ll be expanding their API beyond auto insurance to cover home, motorcycle, and renter’s insurance as well. Going beyond auto insurance should help them corner a new part of the market and fend off any competition that launches stateside, but partnerships with publishers will likely hold the key to unlocking a large audience of people who need insurance.