Fruga, a Manchester-based InsurTech scaleup using open banking to lower renewal premiums, has secured £1m in funding to expand its technology and help consumers pay less for their yearly insurance.
The investment comes from NPIF II – PXN Equity Finance, which PXN Ventures manages as part of the Northern Powerhouse Investment Fund II (NPIF II), and from Haatch, a UK venture capital firm that pairs capital with hands-on support for founders. Fruga had been bootstrapped until this round.
With the backing of two established investors, Fruga intends to expand its workforce, with key appointments expected during Q1 2027. It also aims to grow its client base, having built a pipeline of well-known household insurers and managing general agents.
Fruga’s platform lets policyholders connect a bank account, credit card or debit card to their insurance policy through open banking. Whenever they spend with selected partners in travel, groceries and high street retail, they accumulate “insurance credits”. These credits grow over time and are applied as a discount at renewal, frequently worth more than £150, while also delivering value across the life of the policy.
Money Expert is among the businesses already working with Fruga. Its customers can collect insurance credits each time they shop with partner brands, building up savings to reduce insurance bills, which are still among the biggest costs facing households.
Insurers can also integrate the technology under their own branding, giving them access to data and the ability to engage customers all year round rather than only when a claim is filed or a renewal is due. Fruga’s founder and CEO Ross McCarthy gave the example of a policyholder getting a new pet. If transaction data showed them buying pet supplies, an insurer could offer pet insurance before that customer turned to a comparison website.
Fruga built its offering after recognising that insurance could gain from an ongoing value layer and open banking, much as consumer banks such as Monzo and Revolut have done. This approach enables insurers to hand perks to customers while using data to gain a deeper understanding of them.
Fruga CEO and founder Ross McCarthy said, “Insurers hold some of the biggest customer bases in the country, yet the industry has trained those customers to see their policy as a price and nothing more. Every renewal sends them back to the comparison sites, and the insurer that wins them this year loses them the next. We started Fruga to take customers out of that aggregator cycle and put real value back at the heart of the relationship. Customer value and data insights is what makes that possible.
“With open banking, an insurer can understand its customers better than anyone else: what’s changing in their lives, what they need next, and how to reward them every day, not just at renewal. That turns renewal from a price check into a reason to stay. This investment means we can bring in top talent to build that out, and our ambition is clear: to become the data layer that powers how UK insurers know, serve and keep their customers.”
PXN Ventures senior investment associate Joe Ball said, “Insurance is a huge market, but the relationship between providers and their customers has remained largely unchanged for years. Most consumers only hear from their insurer when it’s time to renew, and price is often the deciding factor in whether they stay or switch.
“In response, Ross and Asaf have developed a proposition with clear commercial potential, and we’re looking forward to supporting them as they grow their team and bring the technology to more partners across the market.”
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