Battery Ventures leads, Andreessen Horowitz (a16z) co-invests, and Highland Europe increases position
Hyperexponential, a global leader in pricing decision intelligence (PDI) software, announced completion of its $73m Series B funding round led by global technology-focused investment firm Battery Ventures, with participation from leading Silicon Valley investor a16z, and existing Series A investor Highland Europe, which increased its holding.
Hyperexponential serves insurance and reinsurance companies in the multi-trillion-dollar global property-casualty insurance industry, which protects individuals and businesses from a wide array of risks. As factors such as climate change, geopolitical unrest, and cyberterrorism have increased the frequency and severity of risks, the industry has pursued next-generation risk pricing methods to augment or supplant traditional pricing models for a changing world.
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The platform of choice for the world’s most significant insurers
Hyperexponential’s PDI platform, hx Renew, enables insurers to leverage large and alternative datasets, develop and refine rating tools rapidly, and employ sophisticated machine learning approaches to price risk and make data-driven pricing decisions at the portfolio and individual level. Since the company’s Series A in 2021, Hyperexponential has grown sales 10x while staying profitable, serving some of the world’s largest insurers, including Aviva, HDI, and Conduit Re.
This latest round of financing will support Hyperexponential’s expansion into the United States, as it targets opening its New York office this year. It will also enable increased investment in new product capabilities to serve growing client demand in adjacent insurance markets, including the SME insurance sector. The company plans to double its global team to over 200 in the next year.
Sponsoring its Series B investment and joining Hyperexponential’s board as a director is Battery Ventures Partner Marcus Ryu, Co-founder, Chairman, and former CEO of Guidewire Software (NYSE:GWRE), which has grown into one of the world’s largest Insurtech companies since its 2001 founding. Also joining the company’s board is experienced a16z General Partner Angela Strange.
Pricing for today’s frontier of risk
The hx Renew platform, named Insurance Insiders’ 2023 ‘Insurtech Product of the Year,’ enables customers like Convex and Conduit Re to sharpen their competitive edge with enhanced agility, efficient risk transfer, and aggregate loss avoidance. In 2023, Aviva’s Global Commercial and Specialty team was able to build 20 models in 9 months, unlock machine learning capabilities and improve the speed and accuracy of their pricing and underwriting decisions, even as the frequency and severity of risks continues to evolve continuously.
“The insurance industry is at the forefront of a rapidly changing world and must find ways to understand and respond to that change in risk profile,” said Amrit Santhirasenan, Hyperexponential CEO and Co-founder. “We’ve focused on building a capital-efficient, independent business that was both high-growth and sustainable from the outset. Although we have more cash-on-hand than we’ve raised, we wanted to bring on new expertise in our target markets as we continue our growth into new verticals and geographies. We are delighted to have attracted a world-class set of investors who bring an unparalleled combination of experience, expertise, and support to Hyperexponential in the next phase of our expansion.”
“I believe Hyperexponential is among the most compelling new entrants in Insurtech I have seen in over twenty years of serving the P&C insurance industry,” said Marcus Ryu. “As former software engineers and actuaries with top tier commercial insurers, Amrit and Michael each bring a deep practitioner’s grasp of the new requirements for risk pricing. Hyperexponential is rapidly becoming an indispensable tool for the insurance industry to thrive in a future that is not reliably the same as the past.”
Angela Strange, General Partner at a16z says, “Pricing risk is the most critical function of an insurance carrier. Yet, most actuaries still work with cumbersome Excel models and are constrained by legacy software that limits their ability to dynamically incorporate new data and more sophisticated analytical techniques. Amrit and Michael’s actuarial experience helped them design the system the insurance market needed, and Hyperexponential has achieved incredible traction with technical users and executives alike as they’ve completed multiple industry-leading deliveries around the world. hx Renew is rapidly becoming the operating system for pricing risk in the global insurance market. We are thrilled to join forces with the Hyperexponential team as they launch in the US and expand beyond specialty lines”.
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