Two InsurTechs plan to merge in an effort to more broadly tap into embedded insurance demand for travel and other e-commerce businesses.
Seeto, which focuses on helping e-businesses build embedded coverage, said it will merge with Pattern, an InsurTech startup coming out of stealth mode that’s designed to offer innovate parametric and traditional insurance cover as part of the embedded insurance experience. Plans call for the joint company to be called Pattern, with a business model centered around helping businesses generate new revenue streams and boost customer satisfaction through tailored insurance products.
Since merger plans were announced, the companies have jointly raised $25 million in funding, including a recent seed round of $10 million for Pattern. The joint company is backed by Kamet Ventures, the venture builder where Setoo was incubated, Comcast Ventures, MS&AD Ventures, Foundation Capital, FinTLV, TechAviv Founder Partners, Kli Capital, Abstract Ventures, and others.
Plans call for closing the merger near the end of August. At that point, AXA, Spinnaker Insurance Company, Wakam and others will provide Pattern’s insurance backing.
Setoo operates as an insurance MGA in the EU and UK. Pattern is in the process of finalizing becoming an MGA in the United States. The joint company will operate both in the EU and U.S.
The Goal of Merging
The goal of the combined operation is to allow businesses to give customers protected experiences in their online transactions without the need to be an insurer.
“We believe that offering frictionless access to personalized insurance, tightly coupled with the core product, experience or service sold, is key to increasing consumer confidence and transaction volumes,” Meitav Harpaz, CEO and Founder of Pattern Insurance Services, said in prepared remarks.
Through the merger, Pattern will offer a one-stop-shop for embedded insurance products that let businesses offer a fully protected buying experience for their customers with real-time underwriting data for a frictionless buying process. The combined company’s fully automated, embedded insurance-as-a-service platform enables businesses to autonomously build and distribute unique and personalized insurance products.
Coverages produced by Pattern include both parametric and traditional insurance products, which they say are seamlessly offered by businesses to their customers in full compliance with local regulations. Pattern allows companies to protect shoppers from unexpected changes to plans, inclement weather, utility outage or surcharge, shipping delays and more, according to the merger announcement.
Noam Shapira, who co-founded and is also the Co-CEO of Setoo together with Eyal Gluska, said the merger makes sense.
“Following the COVID pandemic, global markets were severely altered, and consumer concerns of unprotected risks grew even bigger. Our customers who use the platform to offer our innovative protections are already seeing accelerated recovery ahead of the rest of the market,” Shapira said in prepared remarks. “We are aligning efforts with Pattern to bring back consumer confidence when making online purchases and we are excited to accelerate our vertical and geographical expansion.”
Assaf Wand, Hippo’s CEO and a Pattern board member, said in prepared remarks that Pattern “has vast potential” ahead of it, “with a strong team, and innovative technology that is massive.”