HugHub enters administration following funding problems

HugHub has entered administration due to funding issues, according to a filing published on Companies House.

According to the document, the firm was placed into administration on 3 April 2024, with two administrators from Resolve Advisory being appointed on 15 April.

HugHub was incorporated on 13 December 2013 and operates as a software solutions provider to insurers and brokers.

Initially, it was funded by founder John Shaw, with additional funding coming from director Andrew Holley. 

However, the document revealed that as a result of disruptions caused by the Covid-19 pandemic, a key customer terminated negotiations with the company without placing a order.

And with a venture capital firm the company sought external funding from not prroceeding with the transaction, the insurtech had to seek alternative financing. 

It went onto say that “following the lack of funding received in September 2023, the directors sought to rationalise the company’s cost base through controlling overheads”.

“Certain senior members of staff agreed to defer a portion of wages and a number of redundancies were implemented,” it added.

“The board of directors also provided further funding to the company by way of personal loans totalling circa £55k to help alleviate cash flow concerns.”

’Absence’

The document also stated that despite generating revenue from platforms, the underlying business was not yet cashflow positive and still relied on shareholder funding to run the platforms and working capital requirements of the company.

“In the absence of any further investment, the board of directors formed the view that the company was or was about to become insolvent,” it added.

Insurance Times has contacted HugHub for further comment.