After building out and testing its insurance platform in the Canadian market, Toronto-based startup Foxquilt has secured $8 million CAD in Series A financing to fuel its expansion into the United States (US), where it first launched this summer.
Armed with fresh capital and the support of a slew of new investors, Foxquilt plans to grow its team and bolster its product development efforts, as the startup looks to accelerate the growth of its commercial insurance platform for small businesses across Canada and more US states.
Foxquilt develops, underwrites, and distributes a line of its own commercial insurance products for small businesses.
Foxquilt’s all-equity Series A round was led by new investor Luge Capital, and saw participation from AmTrust Financial and Side Door Ventures. It also included previous Foxquilt investor Extreme Venture Partners, which led the startup’s $1.2 million pre-seed financing in 2018 and participated in its $3.5 million July 2020 seed round. The fresh funding brings Foxquilt’s total funding to date to around $14 million CAD.
Foxquilt was co-founded in 2016 by CEO Mark Morissette and CFO Karim Jamal, two former Real Matters and Aviva Canada employees. The startup provides customized insurance to small businesses through its platform. Foxquilt develops, underwrites, and distributes a line of its own commercial insurance products, leveraging data analytics and artificial intelligence (AI) to match businesses to the right products.
The company aims to provide “a more transparent and valuable means” of securing commercial insurance, looking to combat what it describes as the “one-size-fits-all” approach it says most legacy insurance providers take. According to Foxquilt, legacy insurance providers often provide coverage ranges that leave businesses paying for more than they need, or vulnerable because they lack full coverage.
Foxquilt’s platform looks to solve this issue by allowing small businesses to choose specific coverage and access underwriting services based on their business type and requirements. The startup’s business insurance products include general liability, professional liability, workers’ compensation, cyber, and commercial automobile insurance.
Foxquilt CEO and co-founder Mark Morissette told BetaKit the company spent “the greater part of the last two years” developing its platform and building out its software capabilities and product offerings. The startup began by testing out its thesis in Canada, where it is now available nationwide.
In January, Foxquilt announced that it had partnered with Digital Partners, a London, UK-based firm owned by German insurance company Munich Re that helps insurtech startups with their go-to-market strategy. According to Foxquilt, this partnership gave the startup “the autonomy and capabilities to design innovative products and underwriting and rating algorithms.”
According to Morissette, this new funding will allow Foxquilt to bring its offering to more small business owners in the US, where it is licensed in 40 states. Foxquilt aims to file its products in six US states by the end of 2021 in order to meet varying state regulations.
“Each state has its own regulatory body,” said Morissette. “And then we obviously work with our Munich Re reinsure partner to basically support those filings.”
With the help of Digital Partners, the company plans to file its product in 22 states by the end of next year. The company is also looking to expand its presence in Canada, where, Morissette said, “it’s all about scale and accelerated growth.”
“Of all the solutions we looked at, Foxquilt was by far the best one for SMBs and, given that they design their own insurance products and underwriting process, they can save their customers time, risk and money,” said David Nault, general partner of Luge Capital, who is joining Foxquilt’s board as part of the round.
“We also loved that Foxquilt used a combination of proprietary data, AI, and industry insights to properly assess risk and make the right recommendations to business owners,” Nault added.
Foxquilt currently has 50 employees, and plans to add dozens over the next year to support its growth strategy. The startup is looking to hire across all functions, from tech, to data, sales, service, operations, and underwriting roles, both in Canada and at its Charlotte, North Carolina office.
Morissette added that Foxquilt will probably look to start raising its Series B round in 2022.
Feature image courtesy of Foxquilt