By Miles, which offers pay-as-you-drive car insurance, has raised £1m in a Seed round.
The funding round was led by JamJar Investments, the venture capital fund of the Innocent drinks founders.
By Miles, which launched in the UK last week, charges car owners a fixed annual fee to cover their cars while parked and then bills them monthly, based on the number of miles that they actually drive.
The product is being aimed at drivers who travel under 7,000 miles a year or 140 miles per week in their cars.
This could also help casual drivers to reduce how much they drive, which would have potential benefits for the environment and for public health.
Existing investors InsurTech Gateway, the insurance-focussed incubator set up by investor Hambro Perks and Lumleys, and InMotion Ventures, Jaguar Land Rover’s venture capital fund, also contributed to the round.
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James Blackham, co-founder and CEO of the London-based firm, said he is delighted to receive new backing from JamJar Investments and explained why the company began: “We started By Miles two years ago because we believed drivers like us were being charged way too much to insure cars they rely on but don’t drive that often, so we built a simpler and smarter way of pricing car insurance.
“Following our recent launch, this new round of investment means we can continue to improve the features in our app, making car ownership even easier for people that don’t drive much,” he added.
Annual charges start at £150 a year and driving is billed from 3p a mile. Using this example, someone driving 4,000 miles a year with this policy would pay £270 for a year’s fully comprehensive cover.
To measure mileage, customers plug a Miles Tracker device into their car, which will accurately measure the distance travelled and automatically relay it to a smartphone or computer.
Jon Wright, co-founder of JamJar Investments, said: “As soon as we heard about By Miles, we knew we wanted to get involved. Although car insurance is not exactly a purchase everyone looks forward to making, the team at By Miles are changing that: their pricing is smarter, their customer service better, and their app gives you useful driving tools as well as a policy with added benefits. They’re set to shake up the car insurance market.”