Israeli insurtech startup Vesttoo announced on Monday that it has completed a $15 million Series B equity investment from Mouro Capital, backed by multinational bank Banco Santander, and MS&AD Ventures, the corporate venture capital fund of Japan-based MS&AD Insurance Group Holdings, the fifth largest insurance conglomerate in the world.
According to estimations, the round was conducted at a $300 million company valuation, with Vesttoo expecting to become a unicorn and cross the $1 billion valuation mark over the next year. Vesttoo recorded revenue of several million dollars in 2020, but has increased it to tens of millions in 2021.
“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,” said Yaniv Bertele, CEO of Vesttoo. “Their 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, which comes just three months after Hanaco Ventures led the company's $6 million Series A round, will drive expansion of Vesttoo’s Insurance-Linked Program (ILP) offering, a security-based investment portfolio, as well as its fully digital marketplace for insurance-based risk transfer and investments. Both are integral to Vesttoo’s business strategy, aimed at bridging the funding gap in the reinsurance market.
Vesttoo’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.
Furthermore, Vesttoo’s marketplace provides insurers with access to capital market originated capacity. Investors, on the other hand, benefit from direct access to a new asset class comprised of low volatility insurance risks and attractive risk reward.
Mouro Capital manages $400 million 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,” said Chris Gottschalk, General Partner at Mouro Capital. “We have been impressed with the team’s ability to leverage technology to build a truly differentiated marketplace.”
Jon Soberg, Managing Partner at MS&AD Venture, said: “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. 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.”