Functional Finance, a software platform that integrates and automates data and reporting functions for insurance companies, has secured $8 million in seed capital, plus $2 million in SAFE notes for future equity investments, which will go towards “product development and client relationships.”
The fundraising round was led by venture capital and growth equity firms New Enterprise Associates, Inc. (NEA), Walkabout Ventures and Altai Ventures, with participation from Hank Greenberg’s C.V. Starr Insurance and others.
Co-founded by insurtech entrepreneur Rashmi Melgiri and tech executive Tony DeGangi in 2021, Functional Finance states its mission is to resolve the convoluted operational processes found throughout the insurance sector.
CEO Melgiri previously co-founded CoverWallet and is joined by CoverWallet’s former president Jim Ermilio, who now serves as Functional Finance’s President.
Meanwhile, DeGangi, Functional Finance’s CTO, was previously the co-founder and CTO at Renew.com, an online Medicare brokerage platform.
Melgiri commented, “At my last startup I realized firsthand that spreadsheets and emails are terribly inefficient, error-prone and costly ways for the insurance industry to manage their payables and receivables.
“You can build fast-growing businesses and take payments online but reconciling that on the back end is often overlooked and deprioritized, leaving it to intensive manual labor.
“There was a tremendous opportunity to create an automated technology solution that will make the industry move faster, and the experience should be more efficient and positive for clients and customers.”
Functional Finance notes that as one of the only software solutions exclusively serving the insurance industry, it has focused on building its flagship product and working with clients on integrating this seamless, multi-tenant, multi-solution platform.
The firm continued, “Unlike other software companies that offer efficiencies for a single aspect of financial management, such as payment processing, premium financing or data collection, Functional Finance provides the opportunity for reinsurers, carriers, MGAs, wholesalers and brokers to see the same thing in one place in real-time.”
Rick Yang, Partner, Head of Technology Investing, NEA, said, “The Functional Finance team has created a breakthrough technology that we believe will drive positive experiences and outcomes for the insurance industry, which has historically lagged in adoption of new technologies.
“Rashmi, Tony and the Functional Finance team bring valuable experience and a deep understanding of industry-specific opportunities, and we are thrilled to partner with them to modernize insurance data and reporting.”
