(Image source: Functional Finance website.)
Functional Finance (San Francisco), a software platform dedicated to modernizing financial operations (FinOps) for MGAs, carriers, and wholesalers, has announced the closing of a $20 million Series A funding round led by Walkabout Ventures (Los Angeles) with participation from Munich Re Ventures (Munich) and Phil Edmundson, the visionary behind Corvus Insurance. Functional Finance launched with an $8 million seed round where the company garnered early support from a diverse group of influential insurance and technology investors, including Walkabout, New Enterprise Associates (NEA), Altai Ventures, and Hank Greenberg’s Starr Insurance.
Rashmi Melgiri, Co-Founder and CEO, Functional Finance.
The announcement follows a period of significant growth for Functional Finance which saw an increase of more than 2,500 percent in premium payment volume year-over-year (YOY). The vendor says growth demonstrates the increasing demand for streamlined FinOps in the insurance sector, particularly as MGAs, insurers, and wholesalers modernize and scale.
“Walkabout was excited to lead the Series A round because we have the utmost confidence in the vision and execution of the team since investing in its Seed Round,” comments Josh Diamond, general partner, Walkabout. “Since investing in Functional Finance’s seed round, the company has exceeded all of its early goals and milestones and continues to scale impressively in a challenging market environment. We look forward to continuing to support the team as they continue to expand their footprint in the insurance ecosystem.”
Josh Diamond, General Partner, Walkabout.
“We have watched Functional Finance build a platform with tremendous commercial potential,” says Ben Bergsma, principal, Munich Re Ventures. “The company’s industry expertise and innovative technical approach to automating FinOps will offer the insurance industry greater flexibility and capabilities. We see significant value for many businesses up and down the value chain, including several within our own portfolio, in leveraging the Functional Finance platform.”
Enabling Focus on the Business
Ben Bergsma, Investment Principal, Munich Re Ventures.
Functional Finance describes its platform as offering comprehensive solutions that simplify invoicing, premium payment, collections, reconciliation, and more. By automating these critical back-office functions, the platform enables insurance organizations to focus on creating new products, mitigating existing and emerging risks, and improving underwriting accuracy, according to the vendor.
“We are incredibly grateful for the continued support from our investors,” comments Rashmi Melgiri, co-founder and CEO, Functional Finance and co-founder of CoverWallet with Functional Finance President Jim Ermilio. “This funding will allow us to accelerate our product development and invest in additional strategic hiring for engineering, product development, customer success, and operations. Ultimately, this funding will enable Functional Finance to deliver even more value for our customers and the industry.”
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