Startup Coalition Inc., which provides cybersecurity insurance policies and breach detection software for businesses, today announced that it has secured a $250 million funding round at a $5 billion valuation.
The funding was provided by a consortium that included insurance giant Allianz SE’s Allianz X investment arm, Valor Equity Partners, Kinetic Partners and others. Coalition’s total outside funding now exceeds $775 million.
San Francisco-based Coalition provides cyber insurance plans that help companies mitigate the financial impact of a cyberattack. The startup has 160,000 customers, up from about 52,000 at the time of its previous funding round last October. Coalition says that its run rate gross written premium, a metric used to evaluate the value of customers’ insurance premiums, exceeds $775 million.
Coalition sets its insurance policies apart from the competition by bundling them with cybersecurity software. Additionally, it has an incident response group that helps customers recover from data breaches.
The company scans the web to find systems such as servers that may be accessible over the public internet. Its software identifies systems that belong to its clients and determines whether they contain vulnerabilities. From there, it notifies clients about vulnerabilities in their infrastructure through a cloud-based dashboard.
Coalition says that it helps companies not only detect but also fix vulnerabilities. The startup’s platform provides data on how many security issues there are in a corporate network, what systems they affect and which issues present the highest risk. Administrators can use the data provided by Coalition to prioritize troubleshooting efforts.
The startup helps its customers reduce the risk of a breach in other ways as well. A company that purchases cyber insurance from Coalition can have the startup scan not only its own systems for vulnerabilities, but also find cybersecurity issues affecting suppliers. If a company is targeted by a cyberattack, Coalition’s breach response team can help recover the affected systems.
“Many organizations remain unprotected in the face of rising digital threats, and neither traditional insurance nor cybersecurity alone is well equipped to help them,” said Coalition co-founder and Chief Executive Officer Joshua Motta. “Our active approach to underwriting, monitoring, and responding to digital risk has allowed Coalition to achieve market leading underwriting results while demonstrably reducing claims and losses for our customers so they can continue to thrive in the digital economy.”
One of the factors that helped Coalition more than triple its customer base to 160,000 companies since its last funding round is the startup’s ecosystem of insurance brokers. The startup partners with brokers to sell insurance policies to businesses.
That partner-centric sales approach has helped grow not only its customer base but also revenue. The startup said today that revenue has nearly doubled over the past year, but didn’t disclose absolute numbers.
Coalition will use the proceeds from the funding round to establish a bigger international presence. The startup recently partnered with Allianz, which not only backed the funding round but also underwrites some of its insurance policies, to provide cyber insurance in the U.K. Coalition expects to launch the U.K. business later this year.
In parallel, the startup will use the funding round to broaden its portfolio of risk management services. There’s a possibility that it will make acquisitions to support the effort. Last year, it acquired a fellow startup called Attune Insurance Services LLC that provides software for insurance brokers.
Notably, Attune doesn’t focus solely on cyber insurance. Its software enables brokers to procure multiple types of policies for their corporate clients through a centralized interface. The acquisition of Attune suggests that Coalition’s long-term plans may involve expanding its focus area to additional segments of the insurance market.