CatX raises $2.7 million

CatX , a platform designed to facilitate the flow of alternative capital into the insurance sector, has raised $2.7 million in seed funding. Its backers include top Silicon Valley venture capital firms and angel investors from leading proprietary trading firms and hedge funds.

The funding round marks a key milestone for the company in its mission to bridge the gap between supply and demand in the reinsurance industry.

Earlier this year, CatX was accepted into the startup accelerator programme Y-Combinator, which has helped to build hundreds of successful companies including household names like Airbnb, Instacart, Doordash, Monzo and Dropbox.

The insurance sector is facing a critical challenge due to a shortage in reinsurance capital which is needed to protect insurers from major losses. This has led to substantial price increases, especially for risks like natural catastrophes and cyber threats. In some cases, this has forced insurers to limit their coverage or completely stop writing business such as hurricane insurance in Florida. CatX’s solution to this problem is to introduce more alternative capital to the market. They do this by offering high-return investment opportunities to institutional investors and providing them with the tools they need to understand insurance risks.

CatX is already working with more than 15 leading institutional investors, including North American pension funds, hedge funds and structured credit funds offering insurance companies the opportunity to access billions in capital through the platform.

“At CatX, we focus on providing all the tools necessary for investors to understand and invest in insurance risk. Our platform features advanced risk models to generate actionable investment insights. A key focus for CatX is to make the whole investment process as simple as possible by digitizing the workflow and utilizing AI tools to shorten contract negotiations. Technological innovation is critical in attracting alternative capital providers that want sophisticated analytics and information tools.” – Lucas Schneider, co-founder and CTO.