Alternative rental deposits platform Zero Deposit has raised an additional £1.8 million from its existing backers to both launch its own insurance arm and also grow the business further.

These backers include some of the industry’s biggest names including Connells Group, Acorn Group, KFH, Knight Frank and The Dispute Service (TDS).

The new insurance business, called Equitable Rental Insurance Ltd (ERI), will make the Zero Deposit service a fully-regulated deposit replacement product which will offer agents, landlords and tenants ‘additional security’.

But the move also reflects the growing number of other ‘insuretech’ businesses setting up their own insurance capacity rather than relying on outside providers.

Richard Twigg (pictured left), Connells’ Group Finance and Commercial Director, says: “We are a long-standing supporter of Zero Deposit and its market-leading product, and we are delighted to continue investing in the business and team.

“We see Zero Deposit as a key feature within our lettings toolkit across the Group.”

Sam Reynolds (main pic), CEO at Zero Deposit commented: “It’s a hugely exciting new phase for Zero Deposit; launching our own insurer offers our partners the significant benefits of a regulated, secure product while we gain more flexibility to make improvements to the product and underwriting at pace.

“This funding round equally allows us to further invest in establishing Zero Deposit as the norm in the rental market and deliver our ambitious plans for 2022.”

Zero Deposit was set up in August 2017 with a second-round funding of £5 million after being given a £250,000 start-up injection by Zoopla and initially sources its insurance backing from Munich RE. In December it signed a deal to become the provider of alternative deposits to The Guild’s network of agents.