Insurtech Startup Honeycomb Raises $15.4MM in Series A Round, Led by Ibex Investors
Fast-Growing Digital Insurer to Use Funding to Expand its U.S. Footprint and Proprietary Technology for Multi-Family Properties
Honeycomb today announced that it has raised $15.4 million in a Series A funding round led by Ibex Investors. The fast-growing digital insurance provider has developed the first technology stack for multi-family properties that dramatically streamlines the arduous, time-consuming process faced by landlords and condo owners associations seeking insurance. Moreover, Honeycomb's proprietary AI-driven technology also is the first to enable the delivery of bespoke, "right-priced" insurance coverages – instantly. The U.S. and Israel-based company, which only began writing U.S. policies in June of 2021, now operates in four states -- Illinois, Arizona, Michigan, and Ohio – with plans this year to launch in ten more states covering 60% of the country. Honeycomb expects to insure more than $1B of real estate assets by the end of Q1 2022. "Commercial lines insurance and specifically insurance for multi-family properties is ripe for disruption given the sheer complexity entailed in underwriting this class of risk, its manual processing legacy, and the absence of a leader in the market," observed Honeycomb's co-founder and CEO Itai Ben-Zaken. "At Honeycomb, we have succeeded in converting the institutional knowledge of our team of industry veterans into algorithms that parse deep, first-party, location-specific data to more accurately evaluate risk. As a result, we can perform more robust underwriting quicker and at a lower cost structure than previously possible," he added.
SiriusPoint Ltd, a global insurer and reinsurer, and Honeycomb's own lead underwriting capacity provider, will also participate in this funding round as a new investor alongside lead investor Ibex Investors, and existing investors Phoenix Insurance, Distributed Ventures (FKA NFP Ventures), IT-Farm, and Sure Ventures, all of which have increased their stakes. With this new round, Honeycomb has to date raised $19 million.
"Honeycomb is poised to change the game of real estate insurance," said Gal Gitter, partner at Ibex Investors. "Their platform uniquely leverages both first and third-party data to disaggregate risk in ways that are totally different from the rest of the industry. Honeycomb is growing at a rapid pace since its launch, and we believe they will become the dominant platform in this market," he added.
In a market segment estimated to be worth $26 billion in the U.S. alone, Honeycomb is the first multi-family property insurance provider to innovate simultaneously on 3 distinct fronts:
(1) Streamlining the customer and broker experience; (2) Leveraging unique proprietary underwriting technology that accurately "right-prices" every individual risk and provides discounts no other provider gives, and; (3) Offering bespoke insurance coverage that adapts to ever-changing client needs.
For example, Honeycomb allows for customized policies that hadn't existed within the segment's traditional "one-size-fits-all" approach. These include insuring properties with Airbnb rentals while offering enhanced Ordinance and Law coverage, distinct Business Income and Extra Expense coverages, and a right-sized approach to deductibles in risk-prone areas.
Multi-family property owners, condo and homeowners associations that follow Honeycomb's guidelines and mitigation requests continue to get deeper discounts as time goes by. This model is a win-win because it encourages positive self-selection. Customers who take great care of their properties will receive prices with which other insurance providers can't compete.
The company sells its policies directly via its own platform and through a hand-picked and growing group of best-in-class insurance brokers who enjoy distinct advantages. With Honeycomb, they can provide as many as 30 bindable quotes per hour, and in real time – a vast improvement over a process that historically took weeks with multiple "touches" and follow-ups to produce a single quote. This translates to greater profitability for brokers, and accounts for the extraordinary interest the company is now receiving from the brokerage community.
"For us, the premise is simple: we reward well-maintained multi-family properties with discounts previously unavailable in the industry. More importantly, our proprietary algorithms and first-party data allow us to have a broader underwriting appetite and the ability to instantly provide most landlords and condo associations with customized policy quotes at the right price." said Mr. Ben-Zaken.
About Honeycomb Honeycomb is a reinsurance-backed MGA providing simple, fair, and affordable multi-family property insurance through its end-to-end digital platform. With offices in Denver, San Francisco and Tel Aviv, Honeycomb leverages proprietary user-generated data, advanced AI, and computer-vision to automate the normally arduous and costly underwriting process. Honeycomb significantly improves the customer experience and provides tailored coverage at a competitive price point and at improved profit margins through its real-time rate/quote/bind offering and its data-driven "right-pricing" advantage.
Honeycomb is backed by top institutional and private investors including IBEX Investors, SiriusPoint Ltd, Phoenix Insurance, New Era Capital Partners, IT-Farm Corporation, Sure Ventures, and Distributed Ventures (FKA NFP Ventures).
For more information on Honeycomb, visit honeycombinsurance.com.