(Image source: Coalition homepage.)
Coalition, a cyber insurance and security company backed by Swiss Re, Lloyd’s and Argo Group, announced that it has raised $90 million in equity capital to fuel its mission to solve cyber risk, and support its rapid growth and global expansion. Valor Equity Partners (Chicago) led the funding with participation from Felicis Ventures (Menlo Park, Calif.), Greyhound Capital (London), and Coalition’s existing investors.
The investment comes as the company’s customer base crosses 25,000—a 600 percent increase from the prior year—making it one of the largest providers of cyber insurance and security in the United States. Coalition’s describes its product offerings as combining best-in-class insurance and proactive cybersecurity tools to help keep businesses safe. Cyber losses cost the global economy upwards of $1.5 trillion each year, and yet the majority of businesses are under-insured and under-prepared to manage and mitigate the risks of an increasingly digital world. Coalition says it is is addressing this gap by providing no-cost cybersecurity tools to prevent losses, security and incident response services to contain them, and comprehensive cyber insurance to help organizations recover from failures and breaches.
“Cybersecurity isn’t a technology problem, it’s a risk management problem,” comments Joshua Motta, Founder and CEO, Coalition. “Traditional cybersecurity technology such as firewalls and antivirus were designed to protect networks, not businesses. Coalition protects an entire business by offering cybersecurity-as-a-service without any additional hardware or software, security and incident response services, and comprehensive insurance cover of up to $15 million.”
The announced funding will help Coalition target three key areas:
Cybersecurity Access: once accessible only to national governments and large enterprises, Coalition will continue to make available, at no cost, state-of-the-art cybersecurity capabilities to small and midsize businesses. Coalition reports that its small and midsize policyholders experienced claims that cost an average of $160,000, an expense that few businesses can afford to bear. “Businesses need more protection than traditional insurers can offer, including help preventing incidents from happening in the first place, and support during and after a crisis,” said Vivek Pattipati, Partner, Valor Equity Partners. “We believe Coalition will be as disruptive to the cybersecurity industry as it has been to the insurance industry.”
International expansion: Coalition plans to make its offerings available globally starting with Canada. “As the entire world becomes increasingly digital, Coalition has a tremendous opportunity to address the real risks that cyber poses across many markets,” comments Pogos Saiadian, Partner, Greyhound Capital.
New Products: Coalition plans to develop additional insurance products to address a new range of threats technology brings to both tangible and intangible assets, many of which are not well covered by traditional insurance policies. “The future of cyber insurance is in integrated solutions to protect against cyber incidents across all asset types,” comments Sundeep Peechu, Managing Director, Felicis Ventures. “Coalition is uniquely positioned to challenge the status quo of insurance by unraveling the complexity of modeling and pricing cyber as a peril.”
“We view Coalition as a category-defining company that is fundamentally changing the way organizations engage with insurance,” comments Antonio Gracias, Founder and CEO, Valor Equity Partners. “Coalition is one of the fastest growing insurance technology companies despite raising a fraction of the capital of its peers.”
Coalition has raised a total of $125 million in equity funding from investors, including Vy Capital, Ribbit Capital, Hillhouse Capital, Valor Equity Partners, and Greenoaks Capital, among others. All existing investors participated in Coalition’s latest round of funding.