The Travelers Companies, Inc. has acquired a majority (60%) stake in Zensurance, a Canadian FinTech start-up that helps businesses find and manage their insurance packages, for a price of roughly CAD $16 million (USD $12.3 million), according to BetaKit.
Zensurance’s Chief Executive Officer (CEO) Danish Yusuf and Chief Technology Officer (CTO) Sultan Mehrabi will now retain just over a third of ownership in the company, which has signed on over 2,500 businesses since raising a $1 million seed in 2016, and currently works with over 40 insurers.
Speaking with BetaKit, Yusuf and Mehrabi said that working with Travelers would be an opportunity to gain more insight into the insurance industry, build up Zensurance’s technology stack, and access expertise on evaluating European, Canadian, and American data to make its pricing assessments more accurate.
“It’s not Travelers’ proprietary data that we would get access to, but just their expertise and experts that can help us look at the data that we have and maybe data that we can buy from outside,” said Yusuf.
Zensurance currently operates independently of Travelers, and said that its goal is to continue working with more insurance companies, as well as getting the authority to bind insurance contracts in real-time through the platform, rather than relying on insurers.
“One of the big things for us is, like in most FinTechs, the backend is really, really messy and insurance companies move extremely slowly, so when we have the opportunity to work with an insurance company that would open the door for us, it’s quite exciting,” Yusuf told BetaKit. “Particularly, Travelers is one of the largest insurance companies in the US and they have a global presence.”
Mehrabi also explained why the company had decided to partner with Travelers rather than pursuing more traditional funding routes. “You have to kind of look at where you are and how quickly you can get to where you want to be, and sometimes partnerships are helpful to get you there,” he said.
“People we’ve met throughout the process were absolutely fantastic…there’s sometimes this stigma in an entrepreneur’s mind about working with industry partners. I think if you just approach it with an open mind, you’ll be surprised.”
However, Yusuf also acknowledged that Travelers may look to consolidate its acquisition in the future by purchasing Zensurance’s remaining shares, as it has historically done with other start-ups.
“That’s something we’ll have to deal with down the line in the future,” he said. “Now there’s no surprise when a large company comes and takes a stake, ultimately they want to own the rest of the company at some point. But that’s something we’ll deal with in the future.”