French cyber insurtech Stoïk has raised €11mn in a Series A funding round as it prepares to expand availability of its all-encompassing cybersecurity software.
The company, which was founded last year, offers a digital ‘broker platform’ for its partner brokers which is designed to facilitate the sale of cyber insurance. Stoïk combines it with several risk monitoring and cybersecurity tools, including a weekly scan of a company’s IT infrastructure and phishing awareness tools, to offer holistic coverage against cyber threats. In particular, it specialises in servicing the SME (small-to-medium sized enterprise) and VSE (very small enterprise) end of the market.
The fundraise is particularly timely for Stoïk, given the nature of cyber threats for SMEs and VSEs. Despite an increase in risk being driven by the political landscape and the adoption of hybrid working, smaller companies are in danger of being priced out of cybersecurity, according to recent research from GlobalData. Increases in insurance premiums caused by high inflation are more likely to impact SMEs, who face a choice between protecting themselves against attacks or prioritising other business expenses instead.
Stoïk describes the European cyber insurance proposition as “a massive opportunity”, citing estimates from an industry body, the Association of Risk Management and Insurance in Business (AMRAE), that show just 8% of medium-sized businesses and less than 1% of SMEs have cyber cover.
The Series A round was led by venture capital firm Andreessen Horowitz (a16z) alongside Alven and Anthemis. They are joined by a number of angel investors including the former CEO of AXA Henri De Castries and Wefox boss Julian Teicke. Stoïk will use the money to build out its team and expand into new European markets.
Stoïk encouraging SMEs to take proactive approach to cyber
Jules Veyrat, CEO and co-founder of Stoïk, says: “We are proud to announce this new round… with a16z, which is a great sign of confidence in Stoïk's model. This confirms our vision and our ambition: to create the best cybersecurity insurance for VSEs and SMEs at European level and to support brokers in the distribution of cyber insurance.
“The fundraising will allow us to support our growth and to recruit the best profiles in the insurance world to continue to develop our insurance expertise, mainly commercial profiles to meet the strong demand from our partner brokers. We will also expand our engineering teams to continue to develop the cyber security solutions that enable our policyholders to protect themselves against attacks.”
Seema Amble, Partner at a16z, says: “Having looked closely at the cyber insurance market globally, we were impressed by the Stoïk team, approach, and quick progress. We believe that there's an exciting opportunity to capture the European market, and that Stoik is in the best position to do so.”
And Thomas Cuvelier, Partner at Alven, continues:: “Stoïk is unleashing a new standard on the cyber insurance market with its data-driven approach; the industry is starting to recognize that managing cyber risk is moving away from a reactive approach to more proactive risk management methods. Since our initial investment, Jules and his team have executed at breakneck speed and have been able to attract top talent. We're looking forward to them expanding their market footprint with this new fundraising milestone.”
Stoïk plans to recruit fresh talent ahead of expansion drive
The cash injection is the latest vote of confidence in the Paris-based startup, which has now raised close to €15mn. It was founded in 2021 by Veyrat along with cybersecurity expert Alexandre Andreini, software developer Nicolas Sayer and insurance advisor Philippe Mangematin. In a short space of time, the startup has established itself as a promising player within the cyber insurance market, boasting hundreds of brokers active on the platform and harbouring ambitions to serve thousands of consumers in the year ahead.
Stoïk has grown its team from a dozen employees six months ago to almost 30 today, and plans to nearly double in size over the next 12 months. It intends to recruit new team members across sales, cyber, marketing and product development and will develop its insurance expertise by adding further experience to its team.
The company then hopes to be in prime position to expand to new European countries, where it will have to tailor its insurance offering in order to adapt to local constraints.
Yann Ranchere, Partner at Anthemis, which participated in the Series A round, says: "After launching a new approach successfully to cyber insurance for VSEs and SMEs in the French market, we look forward to seeing the team continue strengthening their partnerships with brokers and expanding in more European geographies. Cyber risk management combined with cyber insurance continues to be an essential component for protecting VSEs and SMEs in Europe."