- Sale delivers gross return of >5x
- Connection Capital clients invested to back an MBO in December 2017 and made a follow-on investment into the company in May 2019.
Connection Capital, the specialist private client alternative investment business, has exchanged on the sale of multiple award-winning UK online temporary insurance platform, Tempcover (‘the Company’), to RVU, owner of Uswitch, Confused.com and Money.co.uk
The sale (subject to Financial Conduct Authority regulatory clearance) will deliver a highly-profitable gross return of >5x money to Connection Capital clients.
Tempcover was established in 2006 and private investor clients of Connection Capital invested in the Company’s MBO in December 2017 with a further follow-on investment made in May 2019.
Over the period of Connection Capital clients’ ownership, EBITDA has grown substantially and headcount has more than doubled to 51 employees.
Tempcover, based in Fleet, Hampshire, is an insurtech business specialising in the provision of temporary insurance cover, typically providing short term policies from one hour to 28-days, available through customers portals, UK insurance brokers and affiliate partners. It offers simple, cost-effective insurance delivered in minutes to customers requiring short-term cover, for example, when buying or borrowing a car. It also focuses on innovative products in other new areas, such as learner-drivers, students and expats.
The 2017 MBO and growth investment enabled ownership of Tempcover to transfer from passive shareholders to the management team led by CEO and Founder, Alan Inskip, and Connection Capital clients and gave the Company the financial resources to fund development of its market leading technology and customer experience, and to enhance its team.
Over the course of the investment, Connection Capital’s support enabled the Company to expand its offering in multiple areas.
Over the past four and a half years, Tempcover has added multiple new underwriters to its insurer panel; improved economics to reflect its strong loss ratios; developed the Company's technology significantly through the launch of a new award-winning UX across its website and app that has vastly increased conversion; and rolled out new back-end CRM systems and data warehousing, allowing better and more effective use of the Company’s data.
These developments laid the foundation for Tempcover’s growth and provided multiple opportunities to the management team and RVU to further expand Tempcover in the coming years.
As well as taking a Board Director seat at the time of deal completion, Connection Capital made use of its extensive private client network to source a new Executive Chairman, Peter Barrett, who has been instrumental in helping Alan and the management team to develop and expand the Company.
Similarly, across the life of the investment, Connection Capital supported Alan and Peter in the enhancement of the management team with a new Chief Commercial Officer, Rachel Laurie, Chief Financial Officer, Paul Pestell, Chief Data Officer, Graeme McDermott, Chief Product Officer, Paul Salter, and an internally promoted Chief Technical Officer, Marc Pell, all of whom have made an enormous difference and helped drive the Tempcover’s growth.
Miles Otway, Partner at Connection Capital and the deal lead comments:
“This is a great outcome for the management team at Tempcover and our investors. Tempcover has gone from being a tech-enabled broker to a true insurtech pioneer. The management team’s hard work has delivered on the potential we saw in the Company when we first met Alan back in 2017.
"It is an excellent example of how MBOs offer a fantastic opportunity to back committed management teams, support them to develop their businesses and then share in the rewards of transformational growth."
We expect the Company to go from strength to strength with RVU and it has been a pleasure working with Alan, Peter and the whole executive team. They should be very proud of what they have achieved over the past four and a half years and we wish them and the whole team at Tempcover the best in the next stage of the Company’s journey.”
Alan Inskip, CEO at Tempcover said:
"Connection Capital has been a hugely supportive investor, backing us in the initial MBO and then providing us with further investment and support through thick and thin."
"We have made vast strides over the past four years and Tempcover continues to exceed growth expectations. This transaction is good news for everyone. Being backed by RVU presents us with the exciting opportunity to capitalise on the broader motor insurance market. It also creates the opportunity for even further growth and development not only for Tempcover as a brand, but for our panel of insurers, our commercial partners and, most importantly, our employees.”
RVU is a global group of digital brands offering a range of utilities and financial services products, including Uswitch, Confused.com, Money.co.uk and Mojo Mortgages, as well as Rastreator in Spain and LeLynx in France, working to empower people to make confident decisions.
Advisors
Houlihan Lokey provided Corporate Finance advice to Connection Capital and Tempcover on the transaction with legal advice from Gateley Legal.
Vendor due diligence across financial matters, technology and commercial matters was provided by KPMG, Endava and CiL respectively.