Boston-based Corvus Insurance closed a $100 million Series C at a $750 million valuation, as the proliferation in cyberattacks and companies becoming more digital is helping push growth in cyber insurance.
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“This is a fast-growing market that is being exacerbated by the success of cyber criminals,” said founder and CEO Phil Edmundson.
Corvus’ proprietary platform uses data and machine learning, and in one to five minutes can perform an analysis of a company’s IT and software, Edmundson said. After the analyses, Corvus then evaluates, scores and prices a policy if the company qualifies, he added. The company’s average policy size is $9,000 annually. Its primary “Smart” cyber policy is designed for companies with $2 billion or less in annual revenue and limits up to $10 million covering several areas of cyber risk.
With the increase in cyberattacks — as well as companies reexamining their IT structure and employee risk with employees working from home due to the pandemic — Corvus grew its gross written premium 250 percent last year and exited January at a $120 million annual premium run rate.
David Spiro, a principal at Insight Partners which led the round, said the cyber insurance market is different than many sectors, as its lack of history means legacy insurance companies don’t have a significant advantage in the market. He added Corvus’s ability to bring AI and machine learning into underwriting can give it an advantage.
“We are attacking an antiquated commercial market,” he said.
Growing investor interest
Founded in 2017, the 140-person company has raised $147 million to date. Aside from Insight, all the company’s previous investors — Bain Capital Ventures, Hudson Structured Capital Management, MTech Capital, Obvious Ventures, .406 Ventures and Telstra Ventures — also participated in the new round.
The cyber insurance market continues to build to a slow boil. Last year, insurance giant Munich Re estimated the global cyber insurance market could be worth more than $7 billion, including $5.3 billion in the U.S alone. It expects the global market to reach more than $20 billion by 2025.
Investors seem to have taken note. Aside from Corvus’ previous $32 million Series B in January of last year, several other companies in the U.S. cyber insurance and risk market raised cash last year.
Last December, San Francisco-based At-Bay closed a $34 million Series C, nine months after closing its Series B and bringing its total funding raised in 2020 to $74 million. San Francisco-based Coalition —considered by most to be the largest player in the space — secured $90 million in May.
Illustration: Li-Anne Dias.
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