Federato Secures US$100m to Drive AI-Native Insurance Tech

AI-native insurance platform Federato has raised US$100m in Series D funding led by Growth Equity at Goldman Sachs Alternatives.

The round included participation from returning investors Emergence Capital, Caffeinated Capital, StepStone Group and Pear VC.

The funding marks a significant validation of insurers' growing appetite for AI-native solutions over traditional legacy systems retrofitted with AI capabilities.

Goldman Sachs backs full lifecycle solution

The investment reflects growing investor confidence in purpose-built AI platforms for the insurance sector.

"Our diligence in P&C insurance revealed that Federato's AI-native platform delivers a step change in ROI and efficiency compared to prior generations of core systems," says Jade Mandel, Managing Director at Growth Equity at Goldman Sachs Alternatives.

"Federato has built the full policy lifecycle solution the market has been waiting for and we're excited to invest in a company whose domain and AI expertise are already delivering measurable results for insurers."

The funding comes as AI-focused insurance technology companies attracted US$897.4m across 29 deals in Q3 2024 alone, according to a report from Gallagher Re.

That research found 63.4% of all insurtech deals centred around AI technology during that period.

Agentic AI drives rapid growth

Federato has tripled its revenues in the past year through a combination of new client acquisitions and expansion among existing customers.

The growth follows its US$40m Series C raise less than 12 months ago.

"Executives use AI every day and have an intuitive understanding of what it should deliver," notes Will Ross, Co-founder and CEO of Federato. "But they aren't getting that from AI bolted on to legacy solutions."

"The rising demand for true AI-native capability has surprised even us, and this substantial new investment from Goldman Sachs will help us deliver what customers need."

The company's platform employs agentic AI, a technology approach its co-founders Will Ross and William Steenbergen have been leaders in for over a decade.

Insurers seek speed and customisation

Leading insurers are adopting Federato's platform to shape their operational approach in an AI-driven market.

The system allows carriers to customise instances to align with their specific strategies and workflows.

"As compelling as Federato's agentic AI platform is from a distance, we've been even more impressed by the time to value we've observed," says Michael Waller, VP Technology Business Operations at Mission.

"We're proud to partner with a team that can match the pace at which we're growing."

Elizabeth Johnson, Chief Operating Officer at Ascot, emphasised the strategic importance of AI-integrated tools for maintaining underwriting excellence.

"Our vision of the future is underwriters grounded in underwriting excellence, amplified by seamlessly integrated tools that drive efficiency and superior risk outcomes at every step," Elizabeth notes.

"Our partnership with Federato is vital to this commitment."

Global expansion plans

The company has now raised over US$180m in total funding.

The latest capital injection will support continued product innovation and international expansion to meet rising global demand.

Federato positions itself as the only AI-native platform spanning the full policy lifecycle.

Its agentic AI conducts complex analyses with depth and rigour, freeing up insurers' human capital to focus on nuanced decisions and relationships.

The funding announcement comes as the broader insurance sector grapples with integrating artificial intelligence whilst managing legacy infrastructure constraints.