North East insurance tech company Honcho collapsed with a deficiency of more than £4m, new documents have revealed.
Honcho Markets Ltd – which traded as Honcho – called in liquidators earlier this month after efforts to find a buyer for the business failed. The company had been incorporated by Gavin Sewell and Frank Speight amid moves to disrupt the vehicle insurance market through its app and website.
But restructuring and recovery specialists Andy Pear and Milan Vuceljic at Moorfields Advisory Ltd were appointed joint liquidators of Honcho Markets Limited on September 30, saying the company had built a reputation in the market but had run into difficulties because of the competitive marketplace.
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The liquidators are currently marketing the company’s assets for sale for the benefit of creditors and said they are open to receiving offers. Before it ceased trading Honcho had a car and separate van insurance site, through which it operated a reverse auction system.
Insurers could bid for drivers’ insurance contracts, competing with each other to offer the best value package in real time. The insurers paid honcho £1 for the right to bid, enabling them to reduce premiums for consumers.
Over the years, Honcho fuelled growth plans with more than £3m in investment through a range of sources, including grant funding, angel investors, crowdfunding and venture capital investments. The Aykley Heads-based business had a long list of insurance companies which had joined forces with the business, but the site was closed in July, with the firm citing rising costs and as competitive market for the decision.
Now the Statement of Affairs has been published showing the firm has a share premium of more than £4m. The result means the firm has “total deficiency for members” of £4.87m. The statement also includes eight pages of shareholders who collectively had bought more than seven million shares in the business.
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The documents show the firm has assets worth £51,283 available for preferential creditors, in the form of cash at bank. Honcho’s intellectual property has a book value of £825,669 - but as assets are currently being marketed for sale the amount they will get is uncertain.
Honcho Markets owes money to creditors, both preferential and unsecured creditors, with unsecured non-preferential claims totalling £218,262. The unsecured claims include £26,997 owned to trade and expense creditors, £76,965 to employees and £114,300 in loans.
Company creditors include Amazon Web Services, Maven Capital Partners and a number of tech companies across the 海角视频. Preferential creditors are listed as employees who are owed £1,600, and HMRC which is owed £30,486 - leaving estimated assets for unsecured creditors of just £19,196. After the appointment of Moorfields as liquidators, Andy Pear, partner, said: “It’s unfortunate not to have found a buyer for the business but the company has some great technology which it has heavily invested in so would be valuable to the right buyer.”
When Honcho announced the closure of its marketplace it said: “We delivered game-changing, unique insight and real-time visibility into the marketplace for our insurance partners, allowing them to better understand customer needs and the value being presented to them by the wider market. Notwithstanding this validation of our premise, the challenge was to bring sufficient volume of customers to Honcho in the face of the £100m+ spent by the big PCWs every year on brand and marketing. Unfortunately, this proved extremely challenging without deploying similar marketing expenditure.
“We are hugely grateful to all those who engaged with us and helped us to bring a transformational insurance marketplace to life, from our fantastic team to our 40+ insurance brand partners, our technology partners, and our committed investors.”
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