London headquartered provider of pricing decision intelligence (PDI) software, hyperexponential, has closed its $73 million Series B funding round, which will support its expansion into the U.S., and greater investment in new product capabilities to meet increased demand.
This latest funding round was led by Battery Ventures, a global technology-focused investment firm, with participation from Silicon Valley investor a16z, and existing Series A investor Highland Europe, which actually increased its holding.
The insurtech closed an $18 million Series A funding round in June 2021, which was led by growth capital fund, Highland Europe.
The company says that the latest financing will be used to support its U.S. expansion plans, with a view to open an office in New York later this year. Additionally, the funds will enable greater investment in new product capabilities as hyperexponential looks to meet growing client demand in adjacent insurance markets, including the SME space.
Over the next year, hyperexponential plans to double its global team to more than 200.
Battery Ventures Partner Marcus Ryu, Co-founder, Chairman, and former CEO of Guidewire Software, sponsored the Series B and will also join the company’s board as a director. Angela Strange, General Partner at a16z, also joins the board.
“The insurance industry is at the forefront of a rapidly changing world and must find ways to understand and respond to that change in risk profile,” said Amrit Santhirasenan, hyperexponential CEO and Co-founder.
“We’ve focused on building a capital-efficient, independent business that was both high-growth and sustainable from the outset. Although we have more cash-on-hand than we’ve raised, we wanted to bring on new expertise in our target markets as we continue our growth into new verticals and geographies. We are delighted to have attracted a world-class set of investors who bring an unparalleled combination of experience, expertise, and support to hyperexponential in the next phase of our expansion,” he added.
The company’s PDI platform, hx Renew, provides insurers with the ability to leverage large and alternative datasets, develop and refine rating tools rapidly, and employ sophisticated machine learning approaches to price risk and ultimately make data-driven pricing decisions at the portfolio and individual level.
Since the Series A round almost three years ago, hyperexponential says that it has grown sales 10x while maintaining profitability, and now serves numerous global re/insurers, including Aviva, HDI, and Conduit Re.
Expanding on its partnerships with global insurers, hyperexponential notes that in 2023, Aviva’s Global Commercial and Specialty team was able to build 20 models in nine months, unlock machine learning capabilities, and improve the speed and accuracy of their pricing and underwriting decisions, via the hx Renew platform.
In November 2023, the insurtech announced a partnership with Akur8 to integrate their complementary PDI capabilities, offering insurers an automated, data-driven system for accurately pricing commercial and specialty insurance products.
Battery Ventures’ Ryu said: “I believe hyperexponential is among the most compelling new entrants in insurtech I have seen in over twenty years of serving the P&C insurance industry.
“As former software engineers and actuaries with top tier commercial insurers, Amrit and Michael each bring a deep practitioner’s grasp of the new requirements for risk pricing. hyperexponential is rapidly becoming an indispensable tool for the insurance industry to thrive in a future that is not reliably the same as the past.”
Strange added: “Pricing risk is the most critical function of an insurance carrier. Yet, most actuaries still work with cumbersome Excel models and are constrained by legacy software that limits their ability to dynamically incorporate new data and more sophisticated analytical techniques. Amrit and Michael’s actuarial experience helped them design the system the insurance market needed, and hyperexponential has achieved incredible traction with technical users and executives alike as they’ve completed multiple industry-leading deliveries around the world. hx Renew is rapidly becoming the operating system for pricing risk in the global insurance market. We are thrilled to join forces with the hyperexponential team as they launch in the US and expand beyond specialty lines.”
“The hx team have been superb to work alongside since we first invested in April 2021. The business has repeatedly beaten its forecasts and we are delighted to support the Company with additional capital. Working alongside entrepreneurs like Amrit and Michael is what makes the VC role awesome,” said Highland Europe partners Laurence Garrett and David Blyghton.
