Insurtech Gateway Australia and the Hunter Equity Group have backed car insurance disruptor Koba’s kilometre-based cover proposal in a $250,000 funding tier.

Insurtech Gateway Australia CEO Simon O’Dell says he is backing Koba, which plans to launch next year, after a third of Australian drivers surveyed said they would strongly consider switching to a per-kilometre offer.

Australia is “behind the curve on this one,” Mr O’Dell says. “We are seeing global markets adopting the connected car faster than expected.

“We are near a tipping point in the car insurance industry and Koba is uniquely positioned to drive the change in Australia.”

Analytics firm McKinsey has estimated 90% of all new cars sold by 2030 will be pre-connected to the internet. Tesla, General Motors and Ford have already launched insurance offers.

Founded by Melbourne tech entrepreneur Andrew Wong, Koba will use a technology platform from the UK to create its pay-per-kilometre car insurance offer, which is aimed at low-usage drivers who can connect directly through their driving app, an on-board device or smartphone.

Koba's founding team has worked across corporate and start-up insurance brands in Australia, US and the UK and says it offers “start-up style determination” balanced with commercial scale and experience.

“We want to unlock the most relevant data that creates better risk models and use AI and machine-learning to drive operational and efficiencies in claims, fraud detection, and risk segmentation,” Mr Wong says.

Koba is still looking for partners to provide underwriting capacity.