Pie Insurance, a startup offering workers’ compensation insurance to small businesses, announced this morning that it has closed on $118 million in a Series C round of funding.
Allianz X -- investment arm of German financial services giant Allianz -- and Acrew Capital co-led the round, which brings the Washington, D.C.-based startup’s total equity funding raised to over $300 million since its 2017 inception. Pie declined to disclose the valuation at which its latest round was raised, other than to say it was “a significant increase.”
Return backers Greycroft, SVB Capital, SiriusPoint, Elefund and Moxley Holdings also participated in the Series C financing.
The startup, which uses data and analytics in its effort to offer SMBs a way to get insurance digitally and more affordably, has seen its revenues climb by 150% since it raised $127 million in a Series B extension last May. Its headcount too has risen -- to 260 from 140 last year.
Pie began selling its insurance policies in March 2018. The company declined to give recent hard revenue numbers, saying it only has grown its gross written premium to over $100 million and partnered with over 1,000 agencies nationwide. Last year, execs told me that in the first quarter of 2020, the company had written nearly $19 million in premiums, up 150% from just under $7.5 million during the same period in 2019.
Like many other companies over the past year, Pie Insurance -- with its internet-driven, cloud-based platform -- has benefited from the increasing further adoption of digital technologies.
“We are riding that wave,” said Pie Insurance co-founder and CEO John Swigart. “We believe small businesses deserve better than they have historically gotten. And we think that technology can be the means by which that better experience, that more efficient process, and fundamentally, that lower price can be delivered to them.”
Pie’s customer base includes a range of small businesses including trades, contractors, landscapers, janitors, auto shops and restaurants. Pie sells its insurance directly through its website and also mostly through thousands of independent insurance agents.
Workers' compensation insurance is the only commercial insurance mandated for nearly every company in the United States, points out Lauren Kolodny, founding partner at Acrew Capital.
“Historically, it's been extremely cumbersome to qualify, onboard and manage workers' comp insurance -- particularly for America's small businesses which haven't been prioritized by larger carriers,” she wrote via email.
Pie, Koldony said, is able to offer underwriting decisions “almost instantly,” digitally and more affordably than legacy insurance carriers.
“I have seen very few insurtech teams that come close,” she added.
Dr. Nazim Cetin, CEO of Allianz X, told TechCrunch via email that his firm believes Pie is operating in an “attractive and growing market that is ripe for digital disruption.”
The company, he said, leverages “excellent,” proprietary data and advanced analytics to be able to provide tailored underwriting and automation.
“We see some great collaboration opportunities with Allianz companies too,” he added.
Looking ahead, the company plans to use its new capital to invest further in technology and automation, as well as to grow its core workers’ comp insurance business and “lay the groundwork for new business offerings in 2021 and beyond.”