Exclusive: Cloud insurtech Korr raises $3.2M
The founders of cloud software insurtech Korr are going after their former employer, Guidewire, and have raised $3.2 million in pre-seed and seed funding thus far, Axios has learned exclusively.
Why it matters: Operating on the cloud is considered a prerequisite for using AI to its full potential.
How it works: Korr offers software on the cloud for insurance carriers (think policy administration, claims, and billing), and does away with on-premise computing.
- Korr's founders say that cuts the cost and number of staff needed by carriers to run their technology, and that carriers who use "cloud-native software" can launch new products faster due to the API-friendly nature of tech.
- "Ideas like using generative AI for underwriting or for claims processing become far more easy to work into the ecosystem than otherwise," says CEO Gregory Ritchie.
Context: Financial services and insurance companies have tested out cloud software, but they've been slow to use it at meaningful scale.
- The Capgemini Research Institute's November World Cloud Report states that 91% of banks and insurance companies have begun working on the cloud, compared to 37% in 2020.
- But per the report, "more than 50% of firms surveyed have only moved a minimal portion of their core business applications to the cloud."
Flashback: Ritchie previously worked at property and casualty insurance software company, Guidewire.
- When the cloud became ubiquitous, he grew frustrated by Guidewire's strategy. Believing there was an opportunity for a company that built insurance software on the cloud from the get go, he formed Korr in 2021 with Kimberly McClinch.
By the numbers: Plug and Play Ventures led the $1.2 million pre-seed round in 2021, while Motive Partners and Tokio Marine Future Fund led its $2 million seed round in August of 2023.
- Guidewire is now valued at about $9 billion on the NYSE.
- Another P&C software company, Duck Creek, was sold last year to Vista Equity Partners for $2.6 billion.
Of note: Korr is currently focused on a small segment of the insurance carrier market — long-term care within life insurance— with plans to broaden that focus in the future.
- It plans to have its first customer up and running this year.