- Insurance technology startup CyberFortress announced recently that it raised $3 million in funding co-led by Greycroft and LiveOak
CyberFortress — an insurance technology startup focused on protecting e-commerce companies from cyber threats — announced that it raised $3 million in a seed round of funding. This funding round was co-led by Greycroft and LiveOak Venture Partners. Existing investor Monte Tulum Capital also joined the round.
What does CyberFortress plan to do with the funding round? The funds will be used for expanding its product development team in order to accelerate its product launch in the Texas market — which is anticipated for early 2020.
Launched in 2018, CyberFortress is developing a new approach to cyber insurance for small businesses that would overcome the issues with existing coverages such as long applications, complicated multi-party coverages, and slow claims payouts.
In order to solve these problems, CyberFortress is building a parametric online revenue interruption policy for e-commerce companies that insures them against the risk of downtime caused by a wide range of potential cyber events, including cyberattacks, internal errors, or third-party failure. And the parametric approach and broad range of covered issues are what distinguishes it from other coverages in the market.
“The main cyber threat facing e-commerce companies is downtime. A DDoS attack, service provider outage, or internal error that takes down their website can be devastating to an e-commerce company,” said Huw Edwards, CEO of CyberFortress. “If a small e-commerce company can’t collect revenue, they may not be able to make their next payroll. Our policy is laser-focused on solving this critical problem.”
CyberFortress already started helping e-commerce companies manage cyber risk as it launched its Downtime Risk Assessment in June. And this tool uses proprietary data collection technology and machine learning methods to assess an e-commerce company’s risk of dealing with downtime by using just their business email address. This tool is free and is accessible on CyberFortress’s website.
“The elegance of CyberFortress’s product is incredibly unique. Their underwriting is efficient and the rapid, automated payment of claims will make for a delightful customer experience. These characteristics are unusual in the commercial insurance universe and we believe they will set CyberFortress on a path to scale,” added Will Szcerbiak — who led the investment for Greycroft.
LiveOak founding partner Venu Shamapant is joining the board of directors in conjunction with the financing.
“At LiveOak, we tend to be entrepreneur-first investors. What caught our attention about CyberFortress is the experience of their team with small- and medium-sized businesses and e-commerce businesses. They have a deep understanding of the true pain points in that market segment. That, coupled with a very innovative solution got us excited about the opportunity to back this team in their efforts to revolutionize the cyber insurance industry,” explained Shamapant.
CyberFortress has been working with international actuarial consulting firm Milliman to develop and validate their risk model. And Milliman principal and consulting actuary Sheri Scott led the team involved in this project.
“The insurance product we are helping CyberFortress develop is a revolutionary approach to identify and insure risk to e-commerce revenue streams,” commented Scott. “We are excited for CyberFortress to launch this innovative product and look forward to continuing to provide InsurTech strategic consulting services to CyberFortress throughout its insurance journey.”
Katie Wade — the former Connecticut Insurance Commissioner — is joining CyberFortress’ board of advisors. Wade decided to work with CyberFortress due to the customer-centric nature of their product.
