(Image source: Vesttoo website.)
Vesttoo, a Tel Aviv-based provider of an alternative reinsurance and investment platform, announces it has raised $6 million in a Series A funding round led by Hanaco Ventures (Tel Aviv/New York. Vesttoo reports that the round is part of Hanaco’s broader investment strategy in Vesttoo, aimed at further developing Vesttoo’s Insurance-Linked Program (ILP) offering, a security-based investment portfolio that the vendor describes as the world’s first fully digital marketplace for insurance-based alternative risk transfer and investments.
Vesttoo describes its ILP offering as a security-based investment portfolio based on non-catastrophe insurance risks, providing asset managers of all types with the unique opportunity to earn additional long-term, sustainable alpha from existing assets without the need to allocate cash. The ILP program offers institutional investors risk remote investments in collateralized reinsurance deals, earning BB spread of AA uncorrelated risk in addition to the yield of their existing, high quality assets, with a significant global deal pipeline targeting first closing of $1B USD AUM within 12 months, the company says.
Vesttoo adds that its marketplace will allow insurers, reinsurers and pension funds to model, structure, price and place their offering online, while giving institutional investors direct access to the untapped market of alternative reinsurance and exceptional return on risk.
The company characterizes both the ILP and the marketplace as novel instruments in the insurance space aimed at increasing liquidity and much needed capacity in the reinsurance market and facilitating the alternative reinsurance ecosystem, which Vesttoo says is an integral part of itss business strategy to bridge the funding gap in the reinsurance market.
“We are happy to have Hanaco on board,” comments Yaniv Bertele, CEO, Vesttoo. “This is an exceptional vote of confidence in Vesttoo’s unique offering. We have a significant global deal pipeline with insurers from the U.S., U.K. and mainland Europe, and are looking forward to further scaling Vesttoo’s ILP and fully digital marketplace with Hanaco’s support.”
Disrupting the Reinsurance Industry
“Vesttoo is disrupting the reinsurance industry,” asserts Pasha Romanovski, Co-Founding Partner, Hanaco Ventures. “The company is building a digital marketplace and has already proven its ability to sign multi-year contracts with leading U.S. and E.U. insurance and reinsurance providers. Hanaco Ventures chose to invest in Vesttoo because of the unique solution and the company’s impressive founding team who will have a big impact in this untapped sector.”