Federato – which is the insurance industry’s first RiskOps underwriting platform – recently 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 Series A.
Essential to Federato’s strategy has been its application of AI and Reinforcement Learning to the problem of portfolio optimization.
The company’s RiskOps provides a real-time platform for both individual risk underwriting and portfolio optimization. And the key 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 proactively recommend the next best actions to users, bridging the art and science of underwriting. Since the company’s Series A funding round, Federato has tripled its customer base, doubled spending within existing customers, and entered several new segments across commercial and personal lines.
KEY QUOTES:
“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.”
— Varun Gupta, Partner at Caffeinated Capital – who joins the company’s board
“Federato’s foundation lies in deep research around how AI can work together with humans towards complex end goals. 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.”
— William Steenbergen, CTO and Co-Founder of Federato, whose graduate work at Stanford’s Human Computer Interaction Group centered around these algorithms
“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. 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.”
— Deb Smallwood, Founder of Strategy Meets Action, and longtime insurance technology analyst
