Corvus Insurance, a two-year-old, Boston-based insurance company that uses data across more than 50 criteria to predict and prevent losses for its corporate customers in the food and pharmaceutical industries, has attracted $10 million in funding from .406 Ventures and Hudson Structured, with participation from Bain Capital Ventures.
The company had previously raised $4 million seed funding led by Bain.
It’s an interesting company. Much of the data it extracts comes from Internet of Things sensors that can be used to predict the likelihood of a claim, including pressure on a roof owing to the weight of snow, for example. But it also relies on other data from all around, including videos, mobile phones and social media and turns them into tools for risk management.
Founder Philip Edmundson is a veteran of the insurance industry, having previously founded and sold a brokerage business in 2015. As he told the outlet Business Insurance earlier this year, he jumped back into the business after spying a fresh opportunity to focus not on getting rid of the middleman — which is the objective of many insurtech startups — but instead on the claims piece of the insurance business, which consumes far more of each dollar spent in the industry.
When it comes to shipping, for example, he’d said that if a company has a claim or multiple claims around food spoilage with a certain shipper or region, similar instances can be avoided by planning around those situations with recommendations from Corvus. (An agreement between Corvus and one of the largest temperature sensor companies in the world, Sensitech, certainly helps on this front.)
The company is focused for now on the food and pharmaceutical industries because both use sensors everywhere — on vehicles, machines, HVAC systems — for insurance and for regulatory reasons. But presumably, if it can prove its use case, it will expand its target market over time.
In the meantime, it’s part of a fast-growing, and increasingly crowded, landscape. As of last month, global fundraising for insurtech startups surpassed the volume reached in all of 2017, according to advisory firm Hampleton Partners’ latest insurtech M&A market report, which says 204 deals had been closed as of October, compared with 202 last year and 174 in 2016. All told, investors plugged $2.6 billion into those 204 deals — nearly the $2.7 billion that was plugged into insurtech startups in 2015.
Apparently all of those deals are leading to a lot of dealmaking, too. According to the report, the insurtech sector has seen 151 acquisitions since 2016, including by legacy players, as well as private equity firms.
Note: An earlier version of this story relied on an SEC filing that showed Corvus had raised $8 million but was targeting $10 million. Since publishing, Corvus has shared information about its completed financing, including its new backers.