Halifax software-as-a-service company Analyze Re has raised almost $1.4 million.
The financing was led by Innovacorp with $600,000, and whose director of investment Greg Phillips will be joining the Analyze Re board. BDC kicked in $400,000, Rho Ventures a quarter-million, and $135,000 came from angel investors who are already experienced in the reinsurance industry and knowledgeable about Analyze Re’s product.
Hatched at a class called “Starting Lean” at Dalhousie University’s Norman Newman Centre for Entrepreneurship, Analyze Re was developed to help reinsurers assess risk and to provide pricing and portfolio optimization. The co-founders, Oliver Baltzer, Adrian Bentley and Shivam Rajdev, had all worked together in the reinsurance industry previously. The estimated worth of today’s reinsurance industry is approximately $500 billion per year and is growing rapidly. It’s forecast to reach $2 trillion by 2025.
After Dalhousie, the Analyze Re team was accepted to Halifax’s Volta Startup House, and then moved to Moncton’s Launch36 accelerator where it was one of two companies to receive a funding commitment from BDC Venture Capital. It just moved into a new office space on Quinpool Road and has been taking on new staff just before closing this round of funding.
“Friday was a big day for us,” said Bentley. “Not only did we move into our new office, we also closed the round and we’ve taken on three new people so there will be 11 of us, starting Monday.”
During the past year, the trio worked on their business model and strategized how to scale after raising the initial cash injection. The company had set a target in March to raise $750,000 in its first funding round, a target which they not only met and surpassed but nearly doubled.
To develop their prototype, the company has already signed non-disclosure agreements with five reinsurer clients, who are testing the system. They plan to have a functional SaaS reinsurance product in 2014.
The reinsurance industry has grown in recent years, as insurance companies seek to mitigate large obligations, in the face of an increase in payouts related to environmental events such as floods, by transferring portions of their risk portfolios across third-party institutions. Reinsurance is already seeing widespread initial adoption in Latin America and Caribbean countries.
As reinsurers slowly come to grips with the importance of analytics for the growing and converging fields of enterprise risk management (ERM) and the insurance industry in general, the need for risk managers to find the optimal moment for transfer of risk to a reinsurer, as well as to parse policy details to help them make the most effective decision about how exactly to spread that risk is growing. An SaaS tool, using Big Data and the cloud, could not be more useful or timely for this expanding industry.
Rajdev and Bentley will head up the sales team, with an initial focus on Bermuda, which already has a large concentration of reinsurance companies, while Baltzer takes on the job of Chief Technology Officer and focuses on building out the prototype.