Descartes Underwriting, the InsurTech company that specializes in parametric natural catastrophe products, has announced a $120 million Series B funding round.
Growth equity firm Highland Europe is leading the capital-raise alongside international investment company Eurazeo, with participation of existing investors Serena, Cathay Innovation and Blackfin Capital Partners and new entrants Seaya Ventures and Mundi Ventures. The fresh round of capital comes 18 months after the firm’s $18.5 million Series A funding.
The company will use the new financing to grow its technology platform, expand into new lines of business and target larger deals, while continuing its global expansion to better serve brokers and clients.
Structured as a managing general agent and backed by a panel of tier-one risk carriers, Descartes can provide $200 million in capacity per policy. Descartes, which was launched in Paris in 2018, provides a full range of parametric solutions to clients globally from its offices in Singapore, Sydney, New York, Houston, Denver and London. Descartes said the company was “born out of the conviction that climate change calls for a revolutionary approach to insurance.”
Coverage for parametric products is triggered when a hurricane reaches a specific wind force. Descartes’ parametric insurance solutions leverage new data sources combined with artificial intelligence (AI).
Descartes’ parametric products were developed by a dedicated team of 50 engineers and data scientists, serving a diverse portfolio of more than 200 corporate clients including many Fortune 500 companies.
“The corporate insurance market is undergoing a momentous shift driven by a changing climate, the growing impact of natural catastrophes and a rise in emerging risks,” said Tanguy Touffut, CEO and co-founder of Descartes Underwriting, in a statement.
“Our aim is to be the global leader in delivering truly revolutionary solutions to brokers, corporations and public entities for these evolving exposures. With the support of our partners, we will continue to develop and deploy a new generation of insurance products that are entirely tech-driven, simpler, more transparent and quicker to pay in the event of a loss—adapted for the new risks corporations and governments increasingly face,” he added.
“We are proud to work with Highland Europe, Eurazeo, Seaya and Mundi Ventures, all of which have incredible track records and an entrepreneurial mindset, making them the perfect match for us to scale with. We are also grateful for the continued support of our existing investors, Blackfin Capital Partners, Serena and Cathay Innovation, each of which has been integral to our incredible success to date.”
“Tanguy, Sébastien and Kevin have developed the most innovative and successful set of insurance products we have seen in the increasingly relevant climate risk sector. We are impressed by their team, culture, set of partners and ambition, and look forward to helping them scale as a global next generation corporate insurance business,” commented Stan Laurent, partner at Highland Europe.
Guillaume d’Audiffret, managing director at Eurazeo, further added: “With climate change and many other emerging risks including most recently the pandemic, corporates and public sector companies are increasingly experiencing the need to access comprehensive and transparent insurance that can cover them efficiently against critical external events. Since its inception three years ago, and thanks to its highly experienced team, Descartes has become a clear category leader in the parametric insurance market.”