Rainbow, the digitally-enabled managing general underwriter, has raised $12 million in seed funding with participation from Arch Capital Group Ltd., Caffeinated Capital, Altai Ventures, Zigg Capital, 8VC, Buckley Ventures, and Habitat Partners.
The company’s flagship program, an admitted business owner’s policy (BOP) product specifically tailored to the restaurant industry, is currently live in eight states and is expected to be available in over 25 states in 2024. These states include Texas, Michigan, Arizona, Indiana, Utah, Pennsylvania, Ohio, and Tennessee.
Bobby Touran, Chief Executive Officer and Co-founder, Rainbow, commented, “Coming out of the pandemic, we saw a gap in the process of other underwriting companies and carriers focused on small commercial, and this was super clear with restaurants and their ever-evolving nature.
“Restaurants are a massive category where every operator requires insurance, and it has proven to be a challenging class for many capacity providers. We felt that building deep domain expertise in the verticals we focus on would allow us to use technology to tailor our underwriting and prioritize loss ratio, all while maintaining the critically important customer-centric approach to small business.”
Rainbow explains that its restaurant program offers producers a specialised appetite at a time when many name-brand carriers are exiting the restaurant class of business. It is exclusively distributed through independent insurance agents and digital partners.
Ray Tonsing, Managing Partner, Caffeinated Capital, added, “We are deeply invested in Rainbow and its world-class founding team, which has accomplished so much in such a short time since inception and despite market headwinds.
“We are extremely encouraged by the early traction of their flagship program, and their exceptional platform capabilities have them poised to scale rapidly”.
The company plans to launch specialized programs in additional business verticals that align with Rainbow’s underwriting approach and vision.
Oleg Ilichev, Managing Partner, Altai Ventures, an insurtech and fintech specialist venture capital firm, concluded, ”We have always observed that customer centricity and vertical depth allows MGAs and carriers to generate outsized underwriting returns, all while being a valuable partner to the end insured. It’s one of the ways to create a clear win-win scenario in the insurance industry. We believe that Rainbow is creating differentiated infrastructure to enable this type of approach to work with technology and data.”
