TrustLayer, a startup automating insurance verification, has raised $6.6 million in a seed round of funding, the company announced Tuesday.
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While insurance isn’t considered the sexiest of industries, the reality is that it touches almost everything and everyone, and that makes for a lot of paperwork, particularly for insurance verification. A homebuilder with 25 subcontractors, for example, would have to verify the different kinds of insurances for each subcontractor before they could begin work on the site.
“The big play was, ‘What if we didn’t have all these hundreds of documents laying around. What if we could validate this in real time?’ ” CEO John Fohr said in an interview with Crunchbase News.
TrustLayer, which is based in San Francisco, automates the paper-based flows. Its system identifies documents, extracts information and compares the information to the insurance requirements.
Fohr compares it to a Carta (equity management solution) for the insurance industry.
“We’re taking this process that’s really frustrating, like cap tables or tracking insurance and compliance stuff, but from there there are other ways we can help our brokers,” Fohr said.
TrustLayer can help builders, for example, make sure that the insurance documents they receive are authentic and current. Rideshare companies could know when a driver cancels insurance coverage and be able to remove them from the platform if necessary.
With the new funding, TrustLayer plans on ramping up its sales and customer success team to meet demand, and building out its digital proof of insurance solution to be able to provide real-time proof of insurance coverage. The company currently has about 16 employees.
TrustLayer was planning to raise its seed round in about six months, but wasn’t able to handle the demand from brokers, which is why it opted to raise now, Fohr said.
Abstract Ventures led the seed round with participation from NFP Ventures, Propel Venture Partners, Precursor Ventures, BoxGroup and BrokerTech Ventures. Twenty insurance agencies in the U.S., as well as some of their executives, also participated in the round, including M3, The Graham Co., Holmes Murphy and Heffernan.
“Instead of us coming at this saying, ‘We’re from Silicon Valley and we have a new way to change your 500-year-old industry,’ we thought: What are ways we can work with these large players throughout the process and have their buy-in from Day One?” Fohr said.
For NFP Ventures, the firm was introduced to TrustLayer after a handful of the insurance brokerage’s clients used the company’s services and had a positive experience. The firm expects TrustLayer to become not only known for its work in insurance verification and compliance, but as an insurance data clearinghouse.
“The company has an enormous market opportunity to bring efficiency to numerous stakeholders – from insured accounts to brokers to carriers – and in doing so will aggregate a massive amount of valuable data for the insurance industry,” NFP Ventures managing director Shawn Ellis wrote in an email. “We were very impressed by the company’s technology and team, and feel confident they’ll claim this space.”
The seed round brings TrustLayer’s total funding to just under $7 million.
Illustration: Li-Anne Dias
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