Insurtech startup Fruga raises £1m from PXN Ventures and Haatch
This article covers Fruga, a Manchester-based fintech startup, which has raised £1m in a growth funding round to scale its open banking technology and expand hiring. The funding will support development of Fruga’s partner-linked rewards system to reduce customers' annual insurance renewal costs and provide insurers with year-round engagement and transaction-derived insights.
Fruga, a Manchester-based fintech startup focused on insurtech, has raised £1m in a growth funding round to scale its open banking technology and expand hiring as it seeks to help customers cut the cost of annual insurance renewals.
Why it matters
Insurance renewals remain a pain point for many households and a churn risk for providers. Fruga’s model aims to turn renewal into an engagement moment rather than a pure price comparison by embedding ongoing value into policies through open banking. If the product delivers, insurers could reduce customer attrition and move away from the seasonal, price-led contact patterns that feed comparison-site switching.
The company says customers can often build up discounts in excess of £150 through regular partner spending, making insurance a more continuous-value product rather than a once-a-year commodity.
Inside the product
Fruga’s technology links a customer’s bank, credit or debit card to their insurance policy via open banking. When customers spend with participating partners across travel, supermarkets and high street brands they earn “insurance credits” that accumulate and reduce renewal costs. Money Expert is an existing partner using the system to let its users build a pot of money that cuts insurance bills.
Insurers can also embed Fruga’s layer under their own brands to gather transaction-derived insights and maintain year-round engagement, rather than limiting contact to claims or renewals. Fruga argues this approach gives insurers a clearer view of life changes and spending patterns that indicate new needs or retention opportunities.
In practice the product sits between bank data and insurer CRM, offering both consumer incentives and a data stream for personalised interactions. Fruga says it has a pipeline of household insurers and managing general agents it is pursuing.
In the announcement, Liz Hunter, managing director at Money Expert, said:
Partnering with Fruga is a fantastic step for Money Expert. Their focus on putting money back in people’s pockets on everyday spending is a perfect fit for our customers, and we’re excited to be working together.
Who are the investors?
The raise comes from NPIF II – PXN Equity Finance, managed by PXN Ventures as part of the Northern Powerhouse Investment Fund II, together with participation from Haatch. No detailed breakdown of the £1m allocation between providers was disclosed. The funding is earmarked for product development, customer growth and hires planned for Q1 2027.
In the announcement, Joe Ball, senior investment associate at PXN Ventures, 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.
In the announcement, Sue Barnard, senior investment manager at British Business Bank, said:
This investment from the Northern Powerhouse Investment Fund II will support Fruga as it scales its technology and builds on its growth ambitions.
Innovative businesses that harness technology to improve products and services have an important role to play in strengthening the digital economy, as well as supporting the UK’s Modern Industrial Strategy to boost productivity and support high-growth businesses across the North. That’s why we’re committed to supporting scaleups across the North through NPIF II, providing the capital to drive forward UK-wide growth.
In the announcement, Marwa Ebrahim, associate at Haatch, said:
Customer churn at renewal is a major problem across insurance, yet most existing retention tools do little to create meaningful engagement or actionable customer insight.
Fruga tackles both sides of that problem, giving customers a stronger reason to stay while giving insurers a better understanding of their customers. We’re excited to back Ross and Asaf as they scale this across the UK insurance market.
If you're researching potential backers in this space:
- Explore our list of fintech venture capital firms in the UK
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Founder perspective
In the announcement, Ross McCarthy, chief executive and founder of Fruga, 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.
McCarthy is positioning hires in product and engineering for early 2027 and hopes to convert a growing pipeline of insurer and managing general agent partners into live integrations.
The bigger picture
Fruga’s approach sits at the intersection of open banking and customer retention tools, a space where many incumbents still rely on episodic contact. If insurers adopt continuous-value models that reward everyday spending, it could shift a sizable portion of customer decision-making away from price alone.
The involvement of NPIF II and a sector-focused VC like Haatch highlights continued investor interest in fintech and insurtech innovation in the North of England. The deal is modest in size but typical of early commercialisation rounds intended to prove product-market fit before larger follow-on funding.
This story underlines broader trends in the UK and Europe: open banking moving beyond fintech wallets into adjacent financial products, and regional funds seeking to back companies that can scale national customer bases while remaining rooted in local ecosystems.
They've invested in Fruga
Get to know these fintech investors
| Investors | Investment Focus | Startup Investments | Round Size | Connect |
|---|---|---|---|---|
 NPIF II (Northern Powerhouse Investment Fund II)( ) | ||||
 PXN Ventures( ) PXN Ventures is a UK-based venture capital firm focused on backing high-growth c... Manchester  | ||||
 Haatch( ) This award-winning UK-based venture capital firm focuses on pre-seed and seed in... Stamford | ||||
 British Business Bank( ) The British Business Bank focuses on enhancing finance accessibility for smaller... Sheffield | ||||
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