The funding round saw the participation of notable investors, including Caffeinated Capital, Altai Ventures, Zigg Capital, 8VC, Buckley Ventures, Habitat Partners, and Arch Capital Group Ltd.
Led by a team of seasoned entrepreneurs with a track record of success, Rainbow aims to redefine small business insurance by implementing innovative data and technology-driven underwriting strategies.
Rainbow’s flagship programme, an admitted business owner’s policy (BOP) product specifically designed for the restaurant industry, is currently operational in eight states.
Anticipated to expand its reach to over 25 states by 2024, the programme is exclusively accessible through independent insurance agents and digital partners. This initiative is strategically timed, addressing the growing void left by many prominent carriers exiting the restaurant class of business.
The injection of US$12 million in funding is poised to further propel Rainbow’s mission of transforming small business insurance underwriting.
“Coming out of the pandemic, we saw a gap in the process of other underwriting companies and carriers focused on small commercial, and this was super clear with restaurants and their ever-evolving nature,” said Rainbow’s CEO and co-founder Bobby Touran.
He continued: “Restaurants are a massive category where every operator requires insurance, and it has proven to be a challenging class for many capacity providers. We felt that building deep domain expertise in the verticals we focus on would allow us to use technology to tailor our underwriting and prioritise loss ratio, all while maintaining the critically important customer-centric approach to small business.”
Rainbow’s engineering team has developed a proprietary and scalable platform. Their innovative approach that combines data and technology, delivers differentiated value for agents and insureds. The platform rewards policyholders for prudent operations, streamlines account placement for agents, and maintains a strategic focus on growing the company’s book with an emphasis on loss performance.
“We are deeply invested in Rainbow and its world-class founding team, which has accomplished so much in such a short time since inception and despite market headwinds,” explained Ray Tonsing, Managing Partner of Caffeinated Capital. “We are extremely encouraged by the early traction of their flagship programme, and their exceptional platform capabilities have them poised to scale rapidly”.
Oleg Ilichev, Managing Partner of Altai Ventures, a leading insurtech and fintech specialist venture capital firm, said: ”We have always observed that customer centricity and vertical depth allows MGAs and carriers to generate outsized underwriting returns, all while being a valuable partner to the end insured. It’s one of the ways to create a clear win-win scenario in the insurance industry.”
He added: “ We believe that Rainbow is creating differentiated infrastructure to enable this type of approach to work with technology and data.”