(Image credit: Kit Suman/Unsplash.)
Ledger Investing, a New York-based InsurTech startup, announced that it has raised $75 million in Series B funding led by WestCap (New York), with participation from Teachers’ Venture Growth (TVG, Toronto) and Intact Ventures(Toronto), and previous investors: SignalFire, MassMutual Ventures, Allegis Capital, and Accel. Ledger Investing says it will use the funds to accelerate revenue growth across its insurance-linked security (ILS) brokerage and asset management businesses, launch data infrastructure service products, and hire more than 200 employees. As part of the round, Jeff Mullen, Partner, WestCap, who will be joining the Ledger Investing Board of Directors.
Samir Shah, CEO, Ledger Investing.
Ledger Investing describes itself as a marketplace connecting insurance risk with capital. The company says that it has successfully expanded ILS into the U.S. casualty market by providing unprecedented data transparency, simplified reinsurance structures, and uncorrelated returns for institutional investors. Ledger Investing reports that it has placed over $400 million in premium into the capital markets, and is on track to exceed $1 billion by the end of the year. Managing General Agents (MGAs) and insurance carriers have leveraged the marketplace for multi-year underwriting capacity and access to alternative capital, which unlocks incremental value, according to Ledger Investing. The company says it has enabled institutional investors to achieve attractive and diversifying, risk-adjusted yields through its ILS fund, Nanorock, and from direct investments in brokered securitizations.
Ledger says that, as it grows, its marketplace will serve virtually all types of insurance risks and capital, encompassing traditional reinsurers, institutional investors, wealth managers, and accredited retail investors. Ledger Investing says its unified data pipeline, Ledger Connect, will power the marketplace with real-time, actionable insights and rich analytics for risk originators as well as investors, establishing the new market standard.
Trillion-Dollar Asset Class
“We are well on our way to creating a trillion-dollar asset class and changing the fundamentals of how insurance risk has connected to capital since the dawn of the (re)insurance industry,” comments Samir Shah, CEO, Ledger Investing. “We have built sophisticated risk and capital infrastructure to address the industry’s structural inability to provide insightful and reliable information to capital providers. Our technology benefits all stakeholders by bringing greater efficiency and transparency to every transaction.”
The company characterizes its role as addressing the biggest challenges that have historically hampered innovation in the insurance and capital markets:
Jeff Mullen, Partner, WestCap.
Institutional investors have long been attracted to casualty insurance, but have been handicapped by the opacity of risk, unreliable nature of data, and convoluted transaction structures.
Insurance capital is inefficient. Every other financial sector has successfully used securitization to access large pools of capital and eliminate unnecessary frictional costs, making consumer credit, mortgages, real estate, and other streams of cash flows into investable asset classes. Insurance is next.
Insurance data is analog, disparate, fragmented, and bespoke. The industry is starved for free-flowing, standardized, real-time data and integrations.
“Ledger Investing is bringing critical transparency and automation to risk transfer,” comments Jeff Mullen, Partner, WestCap. “With its industry-first open data platform, powerful analytics and objective pricing models, Ledger is uniquely positioned to drive transformational change by creating new capital opportunities for MGAs and insurers, as well as an entirely new asset class for many investors.”
Ledger characterizing the Series B round as “pivotal,” says the round will fuel the company’s growth and support its mission to transform the financing structure of the entire insurance industry. The company reports that it is actively seeking software engineers, data scientists, and sales professionals to join the team.