London-based hyperexponential, a provider of pricing decision intelligence (PDI) software, has announced the completion of a $73 million Series B funding round led by tech-focused investment firm Battery Ventures, with participation from Silicon Valley investor a16z and existing Series A investor Highland Europe. The funding will support hyperexponential’s expansion into the US.
hyperexponential serves insurance and reinsurance companies in the P&C space. The company’s PDI platform, hx Renew, allows insurers to utilise large and alternative data sets, rapidly develop and refine rating tools, and use machine-learning approaches to price risks. Since the hyperexponential’s Series A funding round in 2021, it has grown sales by a factor of 10 while remaining profitable. The company serves some of the world’s largest insurers, including Aviva, HDI and Conduit Re.
The latest funding round will support hyperexponential’s US expansion, with plans to open a New York office later this year. It will also enable increased investment in new product capabilities. The company also plans to double its headcount to over 200 in the next year.
Battery Ventures partner Marcus Ryu, the co-founder, chairman and former CEO of Guidewire, sponsored the firm’s Series B investment and will join hyperexponential’s board as a director. Angela Strange, general partner at a16z, will also join the board.
“The insurance industry is at the forefront of a rapidly changing world and must find ways to understand and respond to that change in risk profile,” said Amrit Santhirasenan, co-founder and CEO of hyperexponential. “We’ve focused on building a capital-efficient, independent business that was both high-growth and sustainable from the outset.
“Although we have more cash on hand than we’ve raised, we wanted to bring on new expertise in our target markets as we continue our growth into new verticals and geographies. We are delighted to have attracted a world-class set of investors who bring an unparalleled combination of experience, expertise, and support to hyperexponential in the next phase of our expansion.”
“I believe hyperexponential is among the most compelling new entrants in insurtech I have seen in over 20 years of serving the P&C industry,” Ryu said. “As former software engineers and actuaries with top-tier commercial insurers, Amrit and [co-founder Michael Johnson] each bring a deep practitioner’s grasp of the new requirements for risk pricing. hyperexponential is rapidly becoming an indispensable tool for the insurance industry to thrive in a future that is not reliably the same as the past.”
“Pricing risk is the most critical function of an insurance carrier,” Strange said. “Yet, most actuaries still work with cumbersome Excel models and are constrained by legacy software that limits their ability to dynamically incorporate new data and more sophisticated analytical techniques.
“Amrit and Michael’s actuarial experience helped them design the system the insurance market needed, and hyperexponential has achieved incredible traction with technical users and executives alike as they’ve completed multiple industry-leading deliveries around the world. hx Renew is rapidly becoming the operating system for pricing risk in the global insurance market. We are thrilled to join forces with the hyperexponential team as they launch in the US and expand beyond specialty lines.”
“The hx team have been superb to work alongside since we first invested in April 2021,” said Laurence Garrett and David Blyghton, partners at Highland Europe. “The business has repeatedly beaten its forecasts and we are delighted to support the company with additional capital. Working alongside entrepreneurs like Amrit and Michael is what makes the VC role awesome.”
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