SME health insurance start-up Equipsme has secured £2m in development capital in a funding round worth £2.5m led by private equity firm Livingbridge.

The AXA PPP backed insurer, which launched last year, plans to use the money to ‘scale up its distribution’, and target the 95% of SMEs it says do not offer their employees health cover.

The Series A round is made up of funds from investor Baronsmead Venture Trust, as well as backing from a number of angel investors, Livingbridge has said.

Equipsme offers low-cost health insurance cover to businesses with 249 employees for as little as £7 per employee a month, which includes 24/7 access to private GP services and treatment supplied by AXA PPP.

Matthew Reed, Equipsme’s managing director, said: ‘This injection of capital is a demonstration of confidence from our investors. It gives us the impetus we need to accelerate our growth plans, both through our existing distribution partners and alternative channels.’

He said the company had attracted significant interest from brokers and had already exceeded the number of retail distribution partners anticipated.

Andrew Garside, a partner at Livingbridge, added: ‘Matthew and his team have a clear vision to help smaller and mid-sized UK businesses protect their teams.

‘It’s a great idea supported by a well-thought out product and the scalability to fill the huge gap that exists in the market.’