Federato, the insurance industry’s first RiskOps underwriting platform has announced that it has raised $25 million in Series B funding, led by Caffeinated Capital, with participation from Emergence Capital and Pear VC.
This round comes less than a year after the company announced its $15 million Series A funding, that took place last September. Federato’s approach claims to enable insurers to operationalize underutilized data assets, such as catastrophe models and cyber security scans, to address challenges including climate change, social inflation, and cyber risk.
A major component to the platform’s efficacy is the underlying federated data graph, which enables a single pane of glass view of client information and allows for AI to recommend next best actions to users.
Since their Series A funding, Federato has managed to triple its customer base, doubled spend within existing customers, and entered several new segments across both commercial and personal lines.
Varun Gupta, Partner at Caffeinated Capital, who joins the company’s board, commented: “Since leading their Seed round two years ago, we have been privileged to see the Federato team build something exceptional in P&C insurance. Federato’s software is so valuable that billion-dollar global insurance companies and startup MGAs alike buy, use, and evangelize it. After hearing rave reviews from those customers, seeing the company’s strong growth, and observing the team’s march towards building the Industry Cloud for P&C, we are excited to triple down.”
“Federato’s foundation lies in deep research around how AI can work together with humans towards complex end goals,” said William Steenbergen, CTO and Co-Founder of Federato, whose graduate work at Stanford’s Human Computer Interaction Group centered around these algorithms.
“Our customers are proving that while generative AI has created recent buzz, many other AI use cases are benefitting from the same underpinning innovations. In insurance, the impact of helping a group of underwriters work towards the coordinated end goal of a balanced, growing risk portfolio is crucial. We are excited to be several years ahead of the curve in applying a broad range of machine learning techniques to ensure AI makes an impact in this important industry.”
“The difference between RiskOps and what has traditionally been called an ‘underwriting workbench’ is as big as the difference between ChatGPT and the Google Search we’ve used the last 25 years,” said Deb Smallwood, Founder of Strategy Meets Action, and longtime insurance technology analyst. “Bringing the power of AI to portfolio management represents a fundamental step forward, and we believe insurance is about to have its ‘AI Moment’ with Federato at its core.”
