Butter secures $1.3 million to make insurance less boring for young Aussies

When you hear the word ‘insurance’ you may start hearing white noise as your eyes glaze over. Perhaps you even fell asleep before the end of the last sentence. Butter is looking to change that by making insurance more accessible, flexible and less boring for younger generations.

It’s planning to do it right from your phone, and it just secured $1.3 million in pre-seed funding to help.

This comes off the back of competing Startmate’s Winter22 Accelerator Program, and the round has been led by Flying Fox VC, Quokka Ventures and FB10X adVentures.

Butter wants to democratise insurance

Butter is the brainchild of Steph Skevington and Cassie Bell, former lawyers who saw a huge gap in the market. And before Sydney-siders ask, it doesn’t have anything to do with the fried chicken x sneaker store in Surry Hills. Although that would be a delicious collaboration.

“We were at a party chatting about expensive things that we’d recently broken and complaining about how there was no option for insurance for young people, who are locked out of the industry” co-founder, Cassie Bell, said in a call with SmartCompany.

“[Insurance] is made for homeowners and as we know, with the cost-of-living crisis, people are renting for longer. It’s harder to buy a home. Those kinds of policies, just aren’t really suitable for young people, and renters.”

They also wanted insurance policies that could just cover the things people really loved or were pricey, like a phone or laptop.

They wanted something that could be managed like any other subscription and accessed easily through an app. But that didn’t exist. So they created Butter.

How it works

The idea of the platform is that users will be able to add insurance at checkout with participating partners. For example, if you bought a phone from a partnered retailer, it could be added to your Butter subscription right away.

“We’ve gotten some great feedback from retailers saying they’d love to offer insurance but it’s not part of their core offering and they don’t want to do it ourselves,” Bell said.

“So this offers a really easy plug-and-play solution from that for them. We manage the whole insurance offering, they don’t really have to touch it at all, but they still get the benefit of having that option for their customers.”

If you purchase from a store that isn’t a partner, there is still an option to add that item to your policy manually.

Subscriptions can be paid monthly or annually and can be cancelled at any time. User policies can also all be handled online or through the app.

Ease-of-use and aesthetics are also incredibly important to Butter.

“We don’t want to come across as a boring insurance company because we’re not one. Having that younger style of branding and really seamless simple UX has been super important for us as we’ve been designing both the product and the way people use it.”

Butter confirmed with SmartCompany that customers can insure items valued between $300-$5,000 for electronics, though future category limits are still TBA.

At launch, there won’t be any limits on how many items can be added to their subscription policy. However, Bell says that Butter is looking into adding bundled options next year so it is better value for customers who want to add a lot of individual items.

Butter also confirmed that for the time being, only new products can be added to its subscriptions so it can get the valuation precise and avoid fraud.

Butter is looking to launch before Christmas, when lots of Aussies will be buying goodies that may need insurance. This coincides with its recently-announced partnership with AP+, which will see Butter integrating with the eQR Digital Marketplace being developed by EFTPOS.

This will make the brand the first embedded insurance solution within the Australian payments system.

The company is looking to cover more categories in 2023, with more retail partners also in the works.