TrustLayer Raises $6M Seed Funding - Insurance Equity Management

TrustLayer Secures $6.6 Million in Seed Funding

TrustLayer, a company delivering risk management solutions to insurance brokers through a SaaS platform, has successfully completed a $6.6 million seed funding round.

Abstract Ventures spearheaded the investment, with additional participation from Propel Venture Partners, NFP Ventures, BoxGroup, and Precursor Ventures.

Industry Validation Through Investment

Notably, the startup garnered significant industry endorsement through its investor base. Twenty of the top 100 insurance agencies in the U.S., alongside their C-suite executives, contributed capital to this round.

Among these agencies are prominent names like Holmes Murphy, Heffernan, and M3.

BrokerTech Ventures (BTV), a consortium of 13 tech-focused insurance agencies and 11 leading insurance companies, also participated in the funding. This investment represents BTV’s inaugural investment in a company from its initial accelerator program cohort.

Addressing a Critical Pain Point

According to John Fohr, co-founder and CEO of TrustLayer, the company was established to address a significant challenge faced by millions of businesses: the verification of insurance and business credentials.

This process is often time-consuming and unreliable, potentially leading to financial losses.

Based in San Francisco, TrustLayer leverages robotic process automation (RPA) to create an automated and secure system for insurance verification.

The company distributes its software-as-a-service offering either directly to businesses or through insurance brokers.

Automating Verification Processes

TrustLayer’s platform enables businesses to automate the verification of insurance, licenses, and compliance documentation for partners including vendors, subcontractors, suppliers, borrowers, tenants, ridesharing services, and franchisees.

Essentially, the platform confirms that companies are genuinely insured, rather than falsely claiming coverage.

Early Traction and Market Demand

The company is currently gaining traction within the construction, property management, sports, and hospitality sectors.

Insurance fraud is a substantial concern for companies operating in these industries, as highlighted by Fohr, who also noted the seed round was significantly oversubscribed.

TrustLayer’s ultimate vision is to collaborate with numerous major brokers and carriers across the U.S. to develop a digital, real-time proof of insurance solution for businesses of all sizes and across diverse industries.

“We’re automating a process that is hugely painful and manual to help our carrier and broker partners provide better services to their customers and help companies reduce risk,” Fohr explained to TechCrunch, drawing a comparison to Carta for insurance.

Investor Perspective on TrustLayer

David Mort, a partner at Propel Venture Partners, emphasized that proving insurance coverage is a near-universal requirement in business relationships.

TrustLayer tackles a complex, data-intensive, and unstructured problem within the insurance industry, which creates significant friction in commerce.

Mort also noted the company’s strategic approach of collaborating with existing industry players rather than attempting to disrupt them as an insurance broker.

Propel Venture Partners has a history of investing in fintech companies like Coinbase, DocuSign, Guideline, and Hippo.

Mort acknowledged that while the banking industry has seen considerable fintech innovation, the insurance sector has been comparatively slower to adopt new technologies.

“The most interesting opportunities we see are around modernizing legacy infrastructure, reducing friction, and improving the customer experience,” he stated.

“Insurtech companies are well-positioned in the current market, where recurring revenue is highly valued, and demand for digital financial services is increasing.”

Industry Adoption and Future Plans

Ellen Willadsen, chief innovation officer at Holmes Murphy and executive sponsor of BrokerTech Ventures, reported strong adoption rates for TrustLayer’s digital proof of coverage software among member agencies.

TrustLayer intends to allocate the new funding towards expanding its teams in sales, marketing, and engineering.

Furthermore, the company plans to partner with The Institutes RiskStream Collaborative, a leading blockchain insurance consortium, and insurance carriers to enhance its digital proof of insurance offering.

Recent data analysis indicates a growing interest in insurtech, with private investment mirroring the attention from public investors.