Analyze Re, a Halifax company whose software-as-a-service product helps reinsurers assess risk, has received almost $1.4 million in funding from a range of venture capital funds and angel investors.
The company came together when a trio of executives — Oliver Baltzer, Adrian Bentley and Shivam Rajdev — took their idea for a SaaS product for reinsurers to the Starting Lean course at Dalhousie University. They had been working together in reinsurance support for years and believed there would be huge demand for a risk assessment product among medium-sized companies in the $500-billion reinsurance market. That market, which is forecast to grow to $2 trillion by 2025, provides insurance for insurers to diversify risk.
The company has moved through a series of successes in the past year, being accepted into the Volta Startup House in Halifax, and the Launch36accelerator in Moncton. It was one of two companies in Launch36 that received a commitment for funding from BDC Venture Capital, and quickly outgrew its space in Volta. It opened its new office on Quinpool Road with a larger staff this month.
“Friday was a big day for us,” said Bentley in an interview this weekend. “Not only did we move into our new office, we also closed the (funding) round and we’ve taken on three new people so there will be 11 of us, starting Monday.”
Innovacorp, the Nova Scotia investment agency, is leading the funding round with a $600,000 investment, and director of investment Greg Phipps will join the Analyze Re board.
Two different investment divisions of the Business Development Bank of Canada will invest a total of $400,000. And Rho Ventures, which earlier this year invested in another Halifax startup, Karma Gaming, will sink $250,000 into Analyze Re. The Analyze Re team met Rho investment manager Jeff Grammer earlier this year at an event arranged by Launch36.
The remaining $135,000 will come from angel investors, many of whom work in the reinsurance industry and believe in the potential of the Analyze Re product.
It’s rare for an Atlantic Canadian company to receive such a large funding in its initial round, and the founders are pleased with the diversity of the company’s funding base. “Being a global company, you want to make sure that you have global partners,” said Rajdev.
The financing certainly exceeds the $750,000 target the company set out to raise in March. As the company began to understand its business model, the trio of founders realized they needed more money to grow the business as quickly as they wanted, said Bentley. And investors were willing to provide more money than they had initially expected.
The company now has a working prototype of its product. It is already generating revenues and benefiting from grants and loans from such agencies as the Atlantic Canada Opportunities Agency. Five reinsurers have signed non-disclosure agreements with the company (meaning they will soon be testing the system), and Analyze Re expects to have a full product on the market in 2014.
The company will use the money to continue to build out the product under the leadership of CTO Baltzer, and for marketing. Rajdev and Bentley will head up the sales team, which is having particular success in Bermuda, given the large number of reinsurers on the island.