Portfolio: Private Equity: Current

Tempcover

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In December 2017 Connection Capital completed a £7.5m investment to back a management buy-out of Tempcover. The transaction saw the management team, led by CEO Alan Inskip, reinvesting alongside our clients. Debt finance facilities for the transaction were provided by Santander’s growth capital team.

Investment highlights

  • Date of investmentDecember 2017
  • SectorInsurance
  • Investment typeMBO
  • Investment size£7.5m
  • Revenue£9.1m
  • Employees60
  • StatusLive

The company

Established in 2006, Tempcover is a market leading ‘InsurTech’ pioneer focused on the temporary and flexible insurance markets. In 2017 it won the Queen’s Award for Enterprise in the Innovation category, and it has won numerous industry awards for its technology and customer service. Tempcover writes over 500,000 policies a year through best in class, in-house, proprietary systems.

Investment rationale

Tempcover is the UK market leader in temporary car and van insurance, with strong market share, bespoke in-house technology and an opportunity to grow into other insurance niches.

It had a high quality CEO and, through our network, we were able to introduce both a Chairman, with direct experience in the insurance and fintech sectors, and a new CFO.

Finally we were attracted to the market growth for temporary insurance. This had increased c70% over the four years prior to Connection Capital’s investment.

Progress since investment

Connection Capital's support has enabled the company to expand its offering in multiple areas.

It has added new underwriters to its insurer panel and improved economics which reflect its strong loss ratios.

The company's technology has evolved significantly through the launch of a new UX-driven website that vastly increases conversion, the launch of the Tempcover App, and the roll-out of new back-end CRM systems and data warehousing.

The management team has been bolstered with a new Chief Commercial Officer, Chief Data Officer, Pricing & Product Director and an internally promoted CTO.

We were also able to support the working capital needs of the business with a follow-on investment of £1.2m in April 2019. This was repaid in full via a further refinancing with Santander in January 2021.

Overall, since our clients' original investment, Tempcover has more than doubled its EBITDA and continues to grow.

"Tempcover is a relentlessly innovative company, which is laser focused on the needs of its customers. It has bags of growth potential."

Miles Otway, Partner, Connection Capital

Tempcover deal team

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