UK FinTech startup Hokodo has been awarded €2 million by Horizon 2020, the funding programme for research and innovation run by the European Commission.

Grants are awarded to “market-creating innovations” that demonstrate high growth prospects, and are highly competitive - only around 7.5 per cent of the startups which enter are successful.

Awarded to Hokodo’s French office, the funding will enable the launch of its Application Programming Interface (API) based invoice insurance offering in Europe.

Hokodo was co-founded by Richard Thornton, former chief operating officer at Aspen Insurance, along with Louis Carbonnier and Sami Ben Hatit, former chief executive and chief technology officer of Euler Hermes’ digital practice. Having grown increasingly frustrated with the outdated insurance industry, the trio set out with the aim of giving small businesses access to the financial and insurance services that were once reserved for large corporates – starting with invoice insurance.

Hokodo has applied data science and machine learning to enable small businesses to protect single invoices, rather than having to insure their entire turnover, as required by traditional providers.

Secondly, using APIs, Hokodo is distributing its products via the platforms that small businesses use on a daily basis, such as accounting, invoicing or sales tools – in much the same way as travel insurance is offered on airline websites.

And by bypassing the broker channel, Hokodo is able to dramatically reduce the cost of cover.

Hokodo launched in the UK in October 2018 and has already established a range of partnerships, including with trade finance platform Centrifuge and challenger bank CountingUp. The company has also developed its own credit scoring algorithm, HokoScore, allowing businesses to check the credit ratings of their clients and suppliers.

The Horizon 2020 grant will enable Hokodo to launch invoice protection and HokoScore in France and Germany within the next 12 months, as well as helping it to develop two new trade credit products for the small business market, which are due to go live by the end of 2019.

Co-chief executive Carbonnier commented: “Receiving the grant from Horizon 2020 is a huge boost for the business, not only does it enable us to offer invoice insurance across Europe sooner than we would have otherwise, but we estimate we’ll be able to protect over €200 million worth of B2B trade over the next two years.”

Hokodo previously raised €2.1 million of seed funding in a round led by Anthemis.

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