LimitFi closes seed funding round
Limit Financial (LimitFi), a managing general underwriter (MGU) that specialises in credit insurance and reinsurance solutions, has announced today it has closed a seed funding round led by ManchesterStory, a venture capital firm in the insurtech industry.
Inefficiencies in the credit insurance market
Zach Smith, Co-Founder of LimitFi, added: “LimitFi’s platform leverages our collective experience in insurance, credit, investment management, and capital markets through multiple credit cycles. We would like to thank ManchesterStory for the support as we build the business. We look forward to working together in the years to come”.
Adam Budnick, Co-Founder of LimitFi, said: “Zach and I identified key inefficiencies in the credit markets which make it difficult for (re)insurers to access desired exposures in a cost-effective manner. The successful close of our seed round is confirmation that our approach to addressing those market deficiencies is resonating with the insurance and reinsurance communities”.
As a company, LimitFi primarily focuses on structured credit risks where capital market solutions are needed, and risk is sourced and evaluated through brokers and insurers, asset managers, lenders, and banks.
David Miles, Founding Partner of ManchesterStory, said: “The operational capital provided in this seed round will help LimitFi continue to build out the company’s team and push forward product development. LimitFi provides products and services which have been needed in the (re)insurance sector for some time, and ManchesterStory is pleased to be a part of their journey”.
LimitFi’s services and technology link financial services providers, including banks, lenders, and asset managers, to partners in the insurance ecosystem while the company’s outsourced underwriting model is designed to promote better risk decisions and more diversified exposures.
CB Insights: US Insurtechs Are Competing In A Global Market
In the first half of the year, insurtech companies around the world have raised US$7.4bn, nearly doubling their funding in Q2. According to Digital Insurance, insurtechs have raised US$4.8bn in Q2—an 89% increase in funding from Q1. But US firms are no longer the sole beneficiaries.
What Are the Stats?
Out of the 15 Q2 mega-rounds—those that top US$100mn—only eight included American firms. Pretty good, you might say. That’s over half! But US companies only made up 38% of the deals, which marks a 10% drop from Q1 and a 12% drop from 2020. Technically, therefore, US insurtechs are less influential than they’ve been in the past. But who says this is a bad development?
Despite my American citizenship, I’d argue that a more globally diverse insurance market is only for the best. Many of the world’s citizens who could most benefit from improved insurance services live outside of the States—and deserve local, tech-savvy services.
Why Does This Matter?
You’re always going to see the typical insurtech contenders from Western countries. For instance:
- German-based wefox: US$650mn Series C
- UK-based Bought By Many: US$350mn Series D
- US-based Collective Health: US$280mn Series F
But it’s critical that we address risk across the world. American insurtechs might be some of the most technologically skilled firms in the industry, but it’s not their first goal to address floods in Southeast Asia, crop destruction in China, and COVID complications in South Africa. That’s why we should celebrate that the recent Q2 round included insurtechs from 35 different countries.
According to CB Insights’ Q2 2021 Quarterly InsurTech Briefing, this was the first time that they’d observed insurtech activity in Botswana, Mali, Romania, Saudi Arabia, and Turkey. And ‘from a product, service, distribution, and underlying risk perspective, we—as a society and as an industry—are moving at an unprecedented speed’, says Dr. Andrew Johnston, Global Head of Willis Re InsurTech.
Just ask CB Insights. InsurTech value propositions have resonated with the world.