On this week's Spøtlight, we cast our eye over San Francisco InsurTech startup, Coalition, who combine insurance and proprietary security tools to help businesses manage and mitigate cyber risk.
Founded in 2017, the company raised a $10M Series A back in March of last year led by Vy Capital, Valor Equity Partners and Ribbit Capital.
- Hi Josh, could you tell us a little about yourself and what Coalition does?
- Coalition, our cyber insurance company created by technologists, provides businesses with free cybersecurity tools to mitigate risk and comprehensive coverage to reduce financial loss when technology fails. Changing the paradigm, Coalition created the first Signals Intelligence Platform to underwrite businesses and better understand the entire risk ecosystem.
We found that at present cybersecurity companies are not incentivised to prevent many types of cyber attacks. Coalition on the other hand, provides security tools and claims mitigation to prevent attacks from happening and to lessen the damage of an attack in progress. The company is incentivised to do so because, unlike traditional cybersecurity companies, Coalition pays the price of any attack.
- Where did the idea for the startup come from and what makes it unique?
- Risk is pervasive, and cybersecurity isn’t necessarily solving the whole problem. At Coalition, we believe the solution to cyber attacks isn’t stopping people from getting attacked, but helping people to survive attacks. We melded together our team’s knowledge of security and insurance to solve the problem of cyber risk.
What makes Coalition unique is our full spectrum coverage that goes past just breaches, our strong belief in shifting businesses’ incentives to protect themselves, and our underwriting platform — which slims down the brokerage time from about ten days to under four minutes.
- What do you see as the most important qualities in a company’s team?
- Core elements of our company culture are responsibility, humility, collaboration, and character. We believe in sweeping the shed. In other words, you can never be too big to do the small things that need to be done. Humility is also an essential component of our company’s ethos: at Coalition, no one is left behind and no one is afraid to ask questions.
- Is there a particular new venture within the insurance ecosystem who inspires you?
- Root Insurance. Every time I meet with Alex Timm, I walk away inspired.
- It’s been over 6 months since your $10M Series A. What have you used the funding for so far and do you have plans for another funding round in the near future?
- Simply put: growth. We've more than doubled the size of our team over the past year, and anticipate doing the same over the next year. We also have many exciting announcements for 2019, so stay tuned.
- A $10M investment within your first year suggests the cyber risk market is set for huge growth. How do you view the future of cyber risk and how will you look to stay ahead of competitors as the cyber risk market develops?
- Cyber is one of the smallest lines of insurance in the entire industry (less than 1 percent), even though it is one of the most pervasive risks. However, its growth is undeniable, and it is on track to eventually become a $100B industry globally.
With this growth, we believe cyber insurance will become increasingly required as breaches become more commonplace. The standardisation of cyber insurance will ensure companies’ survivability, and with standardisation there will perhaps be more education on cyber risk. Coalition will work within this to open the door towards a better understanding of the kinds of peril that are out there, and the best methods of dealing with them.
- How has being named in CB Insights’ FinTech 250 helped the company’s profile so far? Can you see any future partnerships forming out of this?
- We'd been doing our best to stay under the radar, and then CB Insights had to go spoil everything. In all seriousness though, it a great recognition of the incredible company our team has built in the less than twelve months since our launch. It has very much helped to boost our profile, as there is a natural desire in any industry to work with the disrupter — or, at the very least, to pay close attention. And a lot of this attention has come from outside of the insurance industry, and will indeed lead to new partnerships where insurance is recognised as a novel and critical component in the management of cyber and technological risk.
- Now that you are licensed in all 50 states, are you considering expansion into any new continents?
- We have been considering an eventual expansion to the UK and Canada, but would take our time in carrying this out.
- If you had to give one piece of advice for aspiring startups looking to disrupt the insurance industry, what would it be?
- The advice I'd give is the same for any startup looking to disrupt any industry: make sure you understand the "job to be done." That is to say, what is the job that your customer is seeking to accomplish, and why should they "hire" your product to solve it? Only when you understand the job better than anyone else, and only after you've built a product to accomplish it better than anyone else, can you disrupt anything. Doing so is easier said than done, however, as often times understanding the job to be done requires radical re-thinking, stripping away all preconceived notions, and avoiding thinking by analogy. In other words, first principles thinking.
- Finally, what’s your favourite way to unwind?
- Travelling. Nothing quite like seeing something new to forget about everything that is old.
To learn more, check out their website.