Data Science Investment Counter —Funding raised by UK data science companies in 2018.
£ 5.640 Million

London AI start-up Cytora raises £25m from EQT Ventures

Cytora, a provider of artificial intelligence (AI) technology solutions for commercial insurance underwriting, has raised £25 million in a Series B round today.

The investment was led by EQT Ventures with participation from existing investors Cambridge Innovation Capital, Parkwalk and several unnamed angel investors.

Founded in 2014 by Richard Hartley, Aeneas Wiener, Joshua Wallace and Andrzej Czapiewski, Cytora is a creation of the University of Cambridge.

The company launched their first product in 2016, selling to many insurance customers, and delivering AI solutions such as property construction features, company financials and local weather, combined with an insurance company’s own internal risk data.

“Commercial insurance underwriting is inaccurate and inefficient,” Cytora co-founder and CEO Richard Hartley said. “It’s inaccurate because underwriting decisions are made using sparse and outdated information. It’s inefficient because the underwriting process is so manual.

“Unlike buying car or travel insurance, which can be purchased in minutes, buying business insurance can take up to seven days,” he added. “This means operating costs for insurers are extremely high and customer experience isn’t good leading to a lack of trust.”

Hartley also claims that Cytora’s AI system is able to reduce the seven-day underwriting process down to 30 seconds via its API. This allows insurers to underwrite systematically and build workflows that provide faster and more accurate decisions.

“Our APIs are powered by a risk engine which learns the subtle patterns of good and bad risks over time,” he explains. “This gives insurers a better understanding of the underlying risk of each business and helps them set a more accurate price. Both customers and insurers benefit.”

Commenting on the investment, EQT Partners, which have previously backed companies such as contraception app Natural Cycles, said Cytora will disrupt business insurance in the same way Monzo has changed banking.

“We’re seeing a radical transformation in insurance, with organisations now expecting the same level of simplicity, transparency and convenience from their business insurers as they’re getting from consumer insurers and digital banks,” said Lyle Fong, partner and investment adviser at EQT.

“Changing core underwriting processes that have been set for decades is hard, but of all the founders I’ve met, Richard and Aeneas have the ambition, grit, and drive to do it.”

Image via PXhere.

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