Authentic Secures Additional $11M for "Captive in a Box"

Authentic Insurance, a New York and Dayton-based start-up, recently raised $11 million in Series A funding for its "Captive in a Box" insurance platform. 

The platform streamlines the captive setup process, enabling smaller entities to establish their own captive insurance programs within weeks.  Behind the scenes, Authentic manages the complexities of establishing and overseeing the captive insurance company. 

The infrastructure supports all aspects of creating a captive insurance offering, including underwriting, regulatory compliance, pricing, actuarial analysis, reinsurance, and claims management. Authentic says its platform also allows for real-time tailoring of insurance coverage, ensuring competitive pricing and increased market addressability. 

Cole Riccardi, CEO and founder of Authentic, said in a statement, "Captive insurance provides many benefits to organizations and their members, but until now, setting one up was a very long and expensive process. Through Authentic's platform, anyone can create their own captive insurance program and realize the benefits within days." 

Last fall, Authentic, comprising professionals from leading technology and insurance firms such as Next Insurance, Amazon, Canary Consulting, and Aquiline Capital Partners, raised $5.5 million in a seed round to launch its insurance platform. The aim, as stated, was to democratize insurance by enabling vertical software as a service (SaaS) companies, associations, franchises, and other organizations to offer insurance to their current customers. Slow Ventures led the seed round, with contributions from Altai Ventures, MGV, Upper90, Clocktower, Commerce Ventures, Mischief Ventures, Core Innovation Capital, and insurance executives. 

"Over the last few years, we've seen a lot of software start-ups becoming FinTech companies by embedding payments and lending products to monetize their customer base," said Marc Schroder, founder of MGV. "Insurance is the next embedded product, but what makes Authentic a win-win is that software companies, roll-ups, etc., can create a new revenue stream while [their] members get hyper-tailored insurance policies at a fair price," he added. 

For instance, Authentic currently provides captive insurance infrastructure to a technology company supplying software to 60,000 small businesses. This enables the company to sell commercial insurance to its customers, achieving dividends and cost savings. Notable clients include Mindbody, Restaurant365, theCut, and PushPress. 

Authentic's platform offers commissions on every policy sold and allows partners to retain most underwriting profits. Integration requires minimal effort, with partners simply inserting a line of code into their platform. Customers can then purchase insurance through a fully branded policy funnel with pre-filled underwriting information for a "one-click" experience. 

"Authentic's 'captive in a box' allows them to sidestep the current distribution problems of adverse risk selection that the insurance industry has struggled to overcome," said Sam Lessin, managing partner at Slow Ventures. "Authentic's partners stand to benefit from sharing data to better assess and price risk, as they are the ones that reap the rewards from more successful programs." 

The recent $11 million funding round, led by FirstMark Capital with participation from Slow Ventures, Altai Ventures, MGV, Upper90, and Commerce Ventures, will support Authentic's growth. The company plans to expand its customer base and workforce throughout 2024 and introduce new products, including workers' compensation, health insurance, and benefits. Authentic currently offers business owner's policy (BOP) coverage, targeting businesses in food & beverage, salon & spa, retail, fitness, and professional services. 

Adam Nelson, partner at FirstMark Capital, said, "The way commercial insurance is bought and sold has largely remained unchanged since it first came into existence over 50 years ago. Authentic is the first company to virtually eliminate the need for traditional carriers. With a platform approach that enables partners to roll out their own new insurance offerings, it's been incredible to watch as millions of businesses instantly gain access to a better insurance model on day one."