FinTech News
Insurtech Platform Authentic Raises $5.5 Million Seed Round
A startup that’s bringing the practice of “captive insurance” to smaller businesses has raised a new round of funding.
About the round:
This week, Authentic announced that it had raised $5.5 million. The seed round was led by Slow Ventures along with participation from Altai Ventures, MGV, Upper90, Clocktower, Commerce Ventures, Mischief Ventures, Core Innovation Capital, and others.
About Authentic:
Authentic is a startup that provides vertical software-as-a-service (SaaS) companies with a “captive insurance” solution. As the company explains, captive insurance is a form of self-insurance where organizations effectively create their own insurance companies. In turn, these businesses can not only create an additional stream of revenue but can also tailor their insurance coverage and enjoy lower premiums. While 90% of Fortune 500 companies reportedly do this, the practice has largely been limited to major companies. However, Authentic’s “Capitive in a Box” aims to change that.
According to the startup, using their platform, vertical SaaS companies can create their programs in a matter of weeks. The Authentic platform includes assistance with legal, underwriting, reinsurance, and claims management. As their site states, “We create and manage an insurance company for you, helping you retain your customers and generate insurance commissions and profits.”
What they’re saying:
Further explaining the pitch behind Authentic, the company’s founder and CEO Cole Riccardi said, “Captive insurance provides many benefits to organizations and their members, but until now, setting one up was a very long and expensive process. Through Authentic’s platform, anyone can create their own captive insurance program and realize the benefits within days.”
Elsewhere, MGV founder Marc Schroder said of his firm’s investment, “Over the last few years, we’ve seen a lot of software startups becoming FinTech companies by embedding payments and lending products to monetize their customer base. Insurance is the next embedded product, but what makes Authentic a win-win is that software companies, roll-ups, etc., can create a new revenue stream while its members get hyper-tailored insurance policies at a fair price.”
My thoughts:
Admittedly, I’m still not 100% sure how captive insurance works — and think the “Captive in a Box” tagline sounds a bit offputting. Nevertheless, as Authentic explains it, the concept does seem intriguing. Therefore, it’s understandable why these venture capital firms would be willing to invest in this early round. With this new funding now secured, perhaps Authentic will have a chance to truly prove its model and attract further investment going forward.
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