CyberFortress, an insuretech startup focused on protecting e-commerce companies from cyber threats, announces that it has closed a $3 million seed round co-led by Greycroft and LiveOak Venture Partners. The funds will be used to expand its product development team in order to accelerate its product launch in the Texas market, which is anticipated for early 2020.
CyberFortress was formed in 2018 to develop a new approach to cyber insurance for small businesses that would overcome the issues with existing coverages: long applications, complicated multi-party coverages, and slow claims payouts.
To solve these problems, CyberFortress is building a parametric, online revenue interruption policy for e-commerce companies that insures them against the risk of downtime resulting from a wide range of potential cyber events including cyber attacks, internal errors, or third-party failure. The parametric approach and broad range of covered perils will distinguish it from other coverages in the market.
“The main cyber threat facing e-commerce companies is downtime. A DDoS attack, service provider outage, or internal error that takes down their website can be devastating to an e-commerce company,” said Huw Edwards, CEO of CyberFortress. “If a small e-commerce company can’t collect revenue, they may not be able to make their next payroll. Our policy is laser-focused on solving this critical problem.”
CyberFortress has already begun helping e-commerce companies manage their cyber risk, having launched its Downtime Risk Assessment in June. This tool uses proprietary data collection technology and machine learning methods to assess an e-commerce company’s risk of suffering downtime, using just their business email address, and is free and accessible on CyberFortress’s website.
Will Szcerbiak, who is leading the investment for Greycroft, has made a number of investments in the insuretech space and is excited about CyberFortress’s approach. “The elegance of CyberFortress’s product is incredibly unique. Their underwriting is efficient and the rapid, automated payment of claims will make for a delightful customer experience. These characteristics are unusual in the commercial insurance universe and we believe they will set CyberFortress on a path to scale,” said Szcerbiak.
The CyberFortress team has deep expertise in cybersecurity, data science, risk management, and insurance, with over a decade of collective experience in each domain. They have united all of this expertise in order to transform the existing cyber insurance industry.
Venu Shamapant, founding partner of LiveOak, will join the Board of Directors with this financing. “At LiveOak, we tend to be entrepreneur-first investors. What caught our attention about CyberFortress is the experience of their team with small- and medium-sized businesses and e-commerce businesses. They have a deep understanding of the true pain points in that market segment. That, coupled with a very innovative solution got us excited about the opportunity to back this team in their efforts to revolutionize the cyber insurance industry,” said Shamapant.
CyberFortress has been working with Milliman, an international actuarial consulting firm, to develop and validate their risk model. Sheri Scott, Principal and Consulting Actuary at Milliman, has led the team involved in the project. “The insurance product we are helping CyberFortress develop is a revolutionary approach to identify and insure risk to e-commerce revenue streams,” said Scott. “We are excited for CyberFortress to launch this innovative product and look forward to continuing to provide InsurTech strategic consulting services to CyberFortress throughout its insurance journey.”
Joining the board of advisors is Katie Wade, former Connecticut Insurance Commissioner, who was drawn to work with CyberFortress because of the customer-centric nature of their product. Also participating in the round is existing investor Monte Tulum Capital, who invested in CyberFortress’s pre-seed round.
CyberFortress is an insuretech company building a new kind of online revenue interruption policy for e-commerce companies. Headquartered in San Antonio, Texas, CyberFortress leverages over a decade of cybersecurity, risk analysis, and portfolio management expertise working with small business data security. For more information, visit www.cyberfortress.com.