Coalition, a San Francisco-based cyber insurance and security company, announced raising a $205 million in a funding round co-led by Durable Capital, T. Rowe Price and Whale Rock Capital, according to a press release.
Existing investors including Index Ventures, General Atlantic, Ribbit Capital, Vy Capital and Valor Equity Partners also participated in the round; this fundraise brings Coalition’s total funding raised to $520 million and raises the company’s valuation to more than $3.5 billion.
The company says it will use the funding to accelerate its scale, help organizations of all sizes combat increasing cyber risks, and expand into new insurance lines in order to become a long-term value creator in public markets.
“Over the last year we’ve seen many traditional insurers increase prices or deny coverage as they struggle to accurately assess cyber risk and cyber coverage. By combining cybersecurity software and services to prevent and mitigate risks, Coalition has been able to continue our growth amidst increasing cyber threats and offer security capabilities that were previously only accessible to large corporations,” CEO and co-founder John Motta said in an email interview with FinLedger.
Founded in 2017 by Motta and John Hering, the company provides cyber insurance for over 50,000 customers, but also offers these users no-cost cybersecurity tools to prevent security threats through its Coalition Control platform. These tools are enabled by the company’s acquisition of BinaryEdge in late 2019 and include continuous surface monitoring, security alerts, recommendations on closing vulnerabilities and downloadable risk assessments.
“Transferring risk is not enough – We actively monitor our policyholder’s digital risk, help them address vulnerabilities, recover stolen funds, and reduce the number of claims our policyholders experience. Coalition is poised for tremendous growth as we help organizations of all sizes manage their risk in the digital economy,” Motta stated in the release.
These tools are intended to prevent cyber threats from ever occurring, with Coalition claiming policyholders file over 66% less claims than competitor cyber insurance providers, despite a large increase in cyber incidents and losses in 2021.
Focusing on cyber threat prevention and security has helped Coalition, with the company crossing a $320 million run rate premium recently, an 800% increase from 2020.
“We are building a new kind of insurance with technology at its core. This is a dramatically different approach and it’s working as we set a new standard for an industry that has been slow to unleash the full power of data,” Motta said.
This approach has also been noticed by regulators and policymakers, with Motta recently being invited to the White House to participate in a cybersecurity meeting convened by President Biden. The CEO used that meeting to announce a public commitment by Coalition to offer its risk management platform, Coalition Control, to any business immediately at no cost.
“Coalition applies AI and machine learning to assist our team in assessing the risk of any given company. This means each organization who applies for coalition cyber gets a unique quote based on their individual circumstances. There’s a wide variety of data points we take into account: data from our public web scans, industry risk trends, corporate structure, location, existing tech stack, employee count and much more,” Motta told FinLedger.
“This means each quote is uniquely personalized for every organization and often we can identify proactive steps that can rescue potential risk as well as the cost of cyber insurance.”