Over the last five years, Fintech has exploded. The growth of new software and services has continued to attract investment, leading to $91.5 billion in global funding this year, nearly 2x last year. Insurtech is about to follow a similar trajectory, thanks to digital infrastructure startups like Herald.
Today, matching the hundreds of insurance carriers with the tens of thousands of small and medium size businesses that distribute insurance is a tedious process that’s both expensive and error prone. Brokers must manually input information about their customers into each insurer’s format, wait for a quote to come back describing coverages and costs, then help the SMB decide which carrier to use. Or they must build and maintain separate integrations with each carrier, a complex and time-consuming technical challenge.
Herald automates this process by connecting directly to multiple insurance carriers, making it easier for brokers to obtain quotes for their SMB customers. Brokers fill out a single form, and Herald does the rest. Even when insurers don’t offer their own application programming interfaces, Herald can extract the relevant information from the carrier’s websites.
Herald addresses a major pain point for the nearly US$300 billion commercial insurance industry, which is why Lightspeed is excited to lead the company’s new $8 million funding round, alongside Underscore and Afore Capital, as well as angel investors Garrett Koehn, Rotem Iram, and Charley Ma.
A Strong Foundation
Our interest in unlocking innovation in the insurance space goes back six years to our original investments in Ladder and At-Bay, now valued at $900 million and $1.3 billion, respectively. We’ve gained key insights into the underlying tech challenges facing the industry, and so has Herald’s founding team.
CEO Matt Antoszyk was At-Bay’s first product manager, as well as a former senior business analyst at McKinsey. CRO Duncan Crystal was also one of At-Bay’s earliest employees, managing business development, partnerships, and the API product. Prior to that, he served as a senior strategy analyst at Gartner. CTO Jacob Barnett was an engineering manager at Haven Life Insurance who helped build the carrier’s core rating and quoting experience technology.
These three leaders bring strong technical backgrounds and deep connections to the insurance ecosystem. We’re very familiar with Matt and Duncan from their work with At-Bay, and are confident they will excel as entrepreneurs.
A Greenfield Opportunity
The insurance industry is really just starting to experience its digital transformation, making Insurtech a greenfield opportunity with an enormous potential market. Starting in commercial insurance, Herald plans to expand to additional markets, and anticipates expanding beyond automating quote requests to other insurance transactions, such as buying, billing, renewals, and claims.
The company’s earliest customer, BindHQ, reports time savings of more than 30 minutes per applicant using Herald technology. As the number of customers grows, we believe the company will experience a network effect: Insurers connected via the API will push more brokers to adopt the company’s solutions, and vice versa.
Commercial insurance is a low-margin, high-volume business desperately in need of automated solutions. Like Stripe and Plaid in the Fintech space, Herald provides digital infrastructure that enables insurance carriers to operate more seamlessly, eliminating much of the friction generated by traditional business processes. We believe the company will become a cornerstone in the growing Insurtech ecosystem.
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