Vancouver-based Quandri experimented with the idea of providing bots-as-a-service to small and medium-sized businesses in a bunch of different sectors before landing on insurance a year and a half ago.
“After working with our first couple of insurance brokers … we realized pretty quickly how massive of a pain point there was for this type of work in the insurance industry,”
Quandri co-founder and CEO Jackson Fregeau told BetaKit in an interview.
To date, Quandri claims it has already saved insurance firms “thousands of hours in lost productivity.”
Launched in early 2021 by Jackson Fregeau and his brother Jamieson (the startup’s president), Quandri builds bots to automate time-consuming, repetitive, and manual tasks for the “extremely transaction-intensive” insurance industry. To date, Quandri claims it has already saved insurance firms across North America “thousands of hours in lost productivity.”
Quandri’s business has grown as insurance industry players have been forced to digitize during the pandemic, become more open and capable of adopting new solutions, and the sector contends with a tight labour market. These tailwinds have made tools like the bots Quandri provides an attractive option.
Fregeau said Quandri has seen “insane growth,” since the startup began investing in sales and marketing earlier this year. The CEO claimed that this year, Quandri is on track to generate 10 times the annual recurring revenue (ARR) it pulled in 2021, though did not disclose a specific figure. “There’s not really any end in sight,” the CEO added.
To keep pace with demand and tackle this opportunity, Quandri has closed $2 million CAD ($1.5 million USD) in seed funding from California’s Aviso Ventures, Markham-based Good News Ventures, and Toronto’s N49P Ventures, with support from undisclosed angel and strategic investors. The startup plans to use this capital primarily to expand its team and add more Python and machine learning engineers, as Quandri looks to launch three new bots this fall.
Given how tight the labour market is currently, and the need many companies face to cut costs and operate more efficiently amid this downturn, Fregeau expects demand for automation and robotic workers to remain strong.
“Quandri isn’t just an amazing team with an interesting technology: it is a game-changer for the insurance industry because it allows brokers to focus on revenue-generating work rather than wasting hundreds of hours a year on repetitive data-entry tasks,” said N49P Ventures co-founder and managing partner Alex Norman. “We are encouraged by Quandri’s early successes, and we are excited to help them accelerate their technology development and market rollout to the insurance industry and beyond.”
Quandri’s September round, raised via a simple agreement for future equity (SAFE), represents Quandri’s first venture financing to date.
Quandri currently serves insurance brokers in Canada and insurance agents in the United States with three bot products. The first focuses on routing policies to the right accounts. The second focuses on document identification, naming, and categorization. The third focuses on the renewal process, examining previous and current policies to generate a report for customers. As to the three new products Quandri plans to launch, Fregeau declined to share detail at this time.
While there are plenty of other companies in the bots-as-a-service industry, including firms like Chicago’s Thoughtful Automation and New York-based Roots Automation, Fregeau noted that neither focus specifically on insurance. “There are no companies doing exactly what we’re doing,” claimed Fregeau.
In Canada, however, there are other insurtech companies focused on automating some parts of the insurance industry, like Toronto-based medical document analysis platform Wisedocs and Kitchener-Waterloo’s ProNavigator, which describes itself as “Google for insurance.”
But according to Fregeau, Quandri competes mainly against business process outsourcing companies, which typically outsource repetitive tasks to human workers in other jurisdictions and countries. Compared to these firms, Fregeau said Quandri can execute these same tasks in an automated, cheaper way, with no mistakes or training involved, while also providing a layer of insight into the work that’s taking place.
According to insurance industry veteran Jeff Roy, president and CEO of Excalibur Insurance, a Quandri customer, Quandri offers “one of the best insurance products that I’ve seen in the last 5–10 years.”
Fregeau claimed that Quandri had no plans initially to raise venture capital funding given the results it had generated serving clients like Excalibur. “We were profitable, we were growing, we were adding customers, we were adding people,” said Fregeau. At the time, the majority of Quandri’s business was inbound or came through referral.
But in early 2022, when the startup began doing more sales and marketing, Fregeau said Quandri started landing customers quickly. “We were growing and our demand was rapidly outpacing what we could actually service.”
“We really just saw how massive of an opportunity there was,” said Fregeau. “We wanted to raise money to make sure that we were the ones capitalizing on [it].”
While Quandri began fundraising before the market downturn, Fregeau said the shift in economic conditions made the process “a little trickier” for the startup.
Longer term, Fregeau and Norman also see plenty of opportunity for Quandri to expand beyond just insurance.
“It was going really well before that downturn happened, and then as soon as it did, things got a lot harder,” said Fregeau. “We ended up having a couple investors pull out of our round. We really had to reconfigure our round and our strategy and just how we’re approaching things.”
Once Quandri did that, Fregeau said things came together, noting that the firm was happy with the valuation it garnered, but declined to disclose the exact number. The CEO attributed this in part to the customer and revenue growth it generated during this period.
As to how well situated Quandri is to navigate this challenging macroeconomic landscape, Fregeau believes the company is “in a bit of a lucky position.”
“Insurance is an extremely resilient industry,” said Fregeau. “Even if there’s a downturn insurance still needs to get paid and will continue to get bought and will continue to get renewed, meaning that [Quandri’s core customers], brokers and agents … still have a viable business no matter what happens.”
Currently, Quandri is focused solely on insurance brokerages, but the startup plans to move into the carrier space over time. Longer term, Fregeau and Norman also see plenty of opportunity for Quandri to expand beyond just insurance.
“The initial market opportunity for Quandri is in the billions of dollars per year as they are dealing with a large problem for their customers and there are tens of thousands of potential customers,” Norman told BetaKit. “Quandri also has the potential to enter adjacent markets, which present just as large opportunities.”
Feature image courtesy Quandri.