Online Reverse Auction Marketplace Company Completes Crowdfunding Round
Law firm Ward Hadaway has represented North East online company, Honcho Markets Ltd, on its latest funding round.
The round was funded by crowdfunding, involving Crowdcube, with the Finance Durham Fund, established by Durham County Council and managed by Maven Capital, providing funds alongside the crowd.
The company has developed a reverse auction marketplace app, initially for car insurance. It allows insurers to enter a competitive real-time bidding process to offer the best price to customers. Rather than being charged a commission, like comparison sites, insurers pay a £1 fee to bid.
The funding will now be used by Honcho Markets Ltd to run and operate the app in Durham’s growing fin-tech cluster.
Legal advice and negotiations on the transaction were led by Corporate Partner Richard Butts at Ward Hadaway’s office in Newcastle.
Richard said: “We are delighted to have had the opportunity to work again with the team at Honcho. We’re always excited to be involved in an investment that opens up opportunities for any business to scale up and expand and look forward to seeing how the team at Honcho progress with their long-term strategic plan for the future.
“Dealing with the requirements of Honcho’s new investors and those of its existing investors was challenging, but I was impressed with how the management team charted their way through the process. The support from the Finance Durham Fund, alongside the support from private individuals, demonstrates the amount of interest in Honcho and its plans.”
Gavin Sewell, CEO of Honcho Markets Ltd, added: “Quite simply, we couldn’t have achieved what we have without relying on the technical excellence of the Corporate team at Ward Hadaway and their commitment to doing whatever it takes to keep Honcho moving forward.
“Richard is a true business advisor, going beyond what could have realistically been expected of him to achieve the best result for Honcho Markets Ltd. His deep understanding of the fin-tech sector was apparent throughout and we wouldn’t hesitate to recommend him to other businesses seeking support.”
Honcho is expected to launch in the summer of this year.
The investment in Honcho is the fifth deal from the £20 million Fund established with funding from Durham County Council and overseen by Business Durham, the economic development organisation for County Durham.
The Fund is managed by Maven Capital Partners, one of the UK’s most active private equity houses and SME finance providers, to support the growth of high potential businesses located in, or looking to relocate to the County. Maven provides flexible funding packages tailored to SMEs’ growth requirements, and opened offices in both Newcastle and Durham last year to support regional businesses.
Alex Marsh, Investment Manager at Maven, said: “Honcho is a hugely exciting new business and we are delighted to support its plans to launch such an innovative app for motorists that empowers the consumer and ultimately reduces the cost of insurance. The team has identified a clear gap in the market and the overwhelming response from the crowd demonstrates that there’s a real appetite for the technology they’ve developed.
“The Finance Durham Fund can provide the financial resources to back business growth for ambitious companies and with such an impressive and highly experienced management team in place we look forward to working with Gavin and his team to help the business achieve its growth plans.”
Quite simply, we couldn't have achieved what we have without relying on the technical excellence of the Corporate team at Ward Hadaway and their commitment to doing whatever it takes to keep Honcho moving forward.
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