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Exclusive: Cloud insurtech Korr raises $3.2M

Jan 11, 2024
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Illustration: Annelise Capossela/Axios

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.
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