Insurance is booming in the fintech sector.
Bringing insurance management services to the cloud is big business apparently, as San Fran-based Embroker scored a $12.2 million Series A round led by Canaan Partners.
Nyca Partners and XL Innovate joined Canaan in the funding. This round follows up on the $2.2 million seed that was raised last year by Bee Partners, FinTech Collective, Vertical Venture Partners and 500 Startups.
“This industry has needed more transparency since its inception — now it’s possible to use technology to achieve that end,” said Embroker founder and CEO Matt Miller in a press release. “By bringing clarity and simplicity to what’s traditionally been an opaque and painful process, we’re enabling business owners to embrace insurance and risk management as tools for growth rather than obstacles.”
The platform lets you manage your policies, track your claims and even analyzes the coverage of your business’s vendors. Embroker claims SMEs use between four and six insurance policies, making it a burden to keep up to date on terms and deciding if those policies are still relevant.
What Embroker sells itself on is letting customers upload the details of their policies to better compare them to others that might be available. Besides pricing, the system spits out recommendations based on priorities and “predictive analytics,” presumably assessing the likelihood a certain type of insurance would be needed.
Insurance moves up the ladder of Fintech success
Several insurance-focused startups have made headlines in 2016 with eight-figure finance rounds. Israel-based Next Insurance, which also focuses on SMEs like Embroker, raised $13 million in March. Trov announced a $25.5 million Series C at the end of April. CB Insights counted over 135 such companies in a March assessment. Chicago-based Insureon, another Embroker competitor, raised $31 million this past October. P2P insurance broker Lemonade raised $13 million of its own last year.
The space is getting bigger though, with some like Lemonade, Friendsurance and Guevara focusing on P2P. Others like Trov are looking to act as bridges between customers and insurance companies, offering more tailored products.
CB also claimed that insurance tech had already tied its record for number of quarterly deals with 24 by the beginning of March. A third of those dealt with health insurance, though financing had actually taken a dip at $55 million spread across those two dozen transactions by mid-March.
Embroker’s investors have strong track records hunting for the next big thing in digital finance.
Canaan has a sizable Fintech portfolio that includes investments in Orchard, LendingClub, Equitas and CircleUp. Nyca’s investments focus squarely on fintech with a number of recognizable names in their portfolio like Payoneer, FundBox, IndieGogo, LendingClub, Affirm and EverCompliant, to name a few.
“Our research and experience shows how little most businesses understand about their risks and insurance needs, and yet almost every business spends meaningful amounts on insurance,” said Hans Morris of Nyca Partners in a press release, clarifying what Nyca might see in this kind of investment. “We believe that Embroker’s vision of bringing clarity, transparency, and simplicity to insurance decisions will make it the core tool used by businesses of all sizes to buy insurance.”
Embroker was founded in 2015 and is located in San Francisco. They have 24 employees as of this writing.