Federato raises $25M in Series B funding to continue catalyzing insurance’s “AI moment”

New Funds will Accelerate Federato’s Growth and Support Its Mission to Bring Efficient Underwriting and Data-Driven Portfolio Management to P&C and Specialty Insurance

San Francisco, June 27, 2023 – Federato, the insurance industry’s first AI-native insurance platform, today announced that it has raised $25M in Series B funding, led by Caffeinated Capital, with participation from Emergence Capital and Pear VC. This round comes less than a year after the company announced its Series A. Since this announcement, Federato has raised a $100M Series D led by Goldman Sachs.

"Since leading their Seed round two years ago, we have been privileged to see the Federato team build something exceptional in P&C insurance," said Varun Gupta, Partner at Caffeinated Capital, who joins the company's board. "Federato's software is so valuable that billion-dollar global insurance companies and startup MGAs alike buy, use, and evangelize it. After hearing rave reviews from those customers, seeing the company's strong growth, and observing the team's march towards building the Industry Cloud for P&C, we are excited to triple down." 

Critical to Federato’s strategy has been its application of AI and Reinforcement Learning to the problem of portfolio optimization. “Federato’s foundation lies in deep research around how AI can work together with humans towards complex end goals,” said William Steenbergen, CTO and Co-Founder of Federato, whose graduate work at Stanford’s Human Computer Interaction Group centered around these algorithms. “Our customers are proving that while generative AI has created recent buzz, many other AI use cases are benefitting from the same underpinning innovations. In insurance, the impact of helping a group of underwriters work towards the coordinated end goal of a balanced, growing risk portfolio is crucial. We are excited to be several years ahead of the curve in applying a broad range of machine learning techniques to ensure AI makes an impact in this important industry.”

Federato’s platform provides a real-time platform for both individual risk underwriting and portfolio optimization. Key to the platform’s efficacy is the underlying federated data graph, which enables a single pane of glass view of client information and allows for AI to proactively recommend next best actions to users, bridging the art and science of underwriting. Since the company’s Series A, Federato has tripled its customer base, doubled spend within existing customers, and entered several new segments across both commercial and personal lines.

“The difference between Federato and what has traditionally been called an ‘underwriting workbench’ is as big as the difference between ChatGPT and the Google Search we’ve used the last 25 years,” said Deb Smallwood, Founder of Strategy Meets Action, and longtime insurance technology analyst. “Bringing the power of AI to portfolio management represents a fundamental step forward, and we believe insurance is about to have its 'AI Moment' with Federato at its core.”

About Federato

Federato is the only AI-native platform that spans the full policy lifecycle, changing the way insurance work gets done. Its proven agentic AI conducts complex analyses with depth and rigor, freeing up insurer’s human capital to focus on nuanced decisions and relationships. Federato is the independent alternative to legacy systems and provides better business outcomes with capabilities that are built-in to insurers’ workflows, not bolted on.