(Image source: Vesttoo homepage.)
Vesttoo, a Tel Aviv-based provider of an alternative reinsurance and investment platform, has announced a $15 million Series B equity investment from Mouro Capital (London), which is backed by a large multinational bank, and MS&AD Ventures (Menlo Park, Calif.), the corporate venture capital fund of Japan-based MS&AD Insurance Group Holdings (Tokio), the fifth largest insurance group in the world.
“Mouro Capital and MS&AD see the same opportunity we see: Vesttoo’s marketplace as a global deal pipeline that drives capacity directly from the capital markets to insurers, while delivering exceptional return on risk to investors by opening up this new asset class,” comments Yaniv Bertele, CEO, Vesttoo. “”heir partnership is an amazing vote of confidence in us and is a signal to financial and insurance institutions that we are significantly increasing business capacity. Together, we are going to scale our ILP and fully digital marketplace.”
The Series B round, coming three months after Hanaco Ventures led the company’s Series A round, will drive expansion of Vesttoo’s Insurance-Linked Program (ILP) offering, a security-based investment portfolio, which the company describes as also the world’s first fully digital marketplace for insurance-based risk transfer and investments. Vesttoo says both are integral to its business strategy, aimed at bridging a funding gap in the reinsurance market.
Vestto’s ILP investment portfolio is focused on fully collateralized Life and P&C reinsurance transactions. Through the ILP program, investors can pledge existing securities as collateral in these transactions, earning additional spreads over current yields (long-term, structured alpha), without increasing their risk profile.
Vesttoo’s marketplace—which the company claims as a first of its kind in the market—provides insurers with access to capital market originated capacity. Investors benefit from direct access to a new asset class comprised of low volatility insurance risks and attractive risk reward.
Mouro Capital, backed by a large multinational bank, is focused on investing in the future of financial services. The firm manages $400M in assets and has invested in companies such as iZettle (acquired by PayPal), Kabbage (acquired by American Express), Creditas, Curve, Ripple, Tradeshift, Trulioo and Upgrade.
“We are excited to partner with Vesttoo as they continue to innovate and bring new products, such as the ILP, to market for both insurers and the capital markets,” comment Chris Gottschalk, General Partner, Mouro Capital. “We have been impressed with team’s ability to leverage technology to build a truly differentiated marketplace.”
Tech-Driven Approach to Risk Transfer
“Our team at MS&AD Ventures is really excited about the tech-driven approach to risk transfer that Vesttoo is applying to the reinsurance market,” says Jon Soberg, Managing Partner, MS&AD Ventures. “We believe this is the future and we see huge opportunities as risks such as climate and cyber become bigger and more complex. Vesttoo has a great team and we are excited to be part of the journey with them.”