Earlier this week Shift Technology (Paris/Boston) announced a Series D funding round of $220 million. Led by Advent International (Boston), and with participation with Shift’s Series C partners Bessemer Venture Partners, General Catalyst, and Iris Capital, the latest funding brings Shift into unicorn territory with a valuation over $1 billion. Shift was founded in 2014 by Jérémy Jawish, Eric Sibony and David Durrleman, with a seed fund of $2 million. The company had its first fraud detection solution client in 2015 and rapidly made an impression in the global insurance industry. Shift opened its first international office in 2016 and raised $10 million in a Series A round led by Accel.
General Catalyst joined Accel as an investor in 2017 in a Series B round raising $28 million. During that year, Shift had its first health insurance client. The following year, the company launched its Claims Automation product and opened its Boston office. Series C funding of $60 million followed in 2019 with the addition of Bessemer as an investor. Last year Shift launched its multi-product strategy and earned its first clients for its Subrogation and Financial Crime Detection products.
Today the company has over 80 clients, more than 350 employees and 10 offices around the world. Following the news of the Series D funding, Insurance Innovation Reporter had an opportunity to talk with Jérémy Jawish, the company’s CEO, about the funding and the company’s plans.
Insurance Innovation Reporter: Tell us how the funding round came about.
Jérémy Jawish, Co-Founder and CEO, Shift Technology: We were initially not running any process to seek investment. However, there was a lot of interest in the market I think because investors know we’re in a unique position, seeing the bets we’ve taken after the Series C round—for example our expansion beyond fraud detection solutions and our beginning to implement in all the geographies we operate in. We had significant momentum in the U.S. in the P&C industry and started going after the health insurance market. In a matter of one or two months we got a lot of interest from investors.
JJ: Yes. What happened is, last year, with the COVID crisis, we had time to think about our strategy, and we also realized our mission made even more sense. With remote work you had a lot of claims adjusters, call centers, underwriters, etc., that had to shift to working from home instantly and had to take thousands of calls from home with kids around without the right processes. Under those conditions, our mission to create AI solutions that can help insurers to be there for their customers made even more sense. So, we thought we should invest much more in it and go all-in into all the products that we could create that could integrate with insurers’ core systems in order to help them automate decisions and help all the professionals to be there for their customers.
Advent loved our vision, and we saw them as an investor that really got it. They really know the insurance market and was a good fit with the Shift team.
IIR: And existing investors also participated in the round.
JJ: Yes. Accel, Bessemer and General Catalyst reinvested.
IIR: What were your considerations in accepting the funding? Your vision made Shift a good investment for Advent; what made Advent a good investor from Shift’s perspective.
JJ: We wanted to raise enough money to make sure we can execute our vision without having to do other financing rounds and while being able to stay independent, not having to sell the company or do a round we won’t want to do. It’s about having the freedom. With $220 million we think we can achieve a lot of our vision with without needing more funding within the next two or three years.
IIR: How would you describe Advent as a good fit as a partner?
JJ: They are minority and long-term investors who don’t require a return in the next few years—that’s why we chose all of our investors. Accel had been reinvesting with us since 2016, General Catalyst since 17, Bessemer since 2019. They always think about reinvesting because they are long-term, vision-supporting investors. And that is what’s important to us: we want to drive the vision with investors who are here to support, not majority investors who are in the driver’s seat. They are here to support us, and we’re all aligned on the vision.
IIR: Speaking of being in the driver’s seat, to what destination are you planning to drive the company?
JJ: We’re really seeing ourselves as leader in AI software for insurance companies. So, it’s about creating multitude of products using AI to automate decisions and help insurers to be there for their customers. It sounds like a broad message but that’s exactly how we feel. We know when someone has a claim, the first stress they have is, ‘Will my insurer cover it?’ Then, ‘Will the process be easy? When there’s any medical, problem, will my insurer cover it?’ Our mission is to create a maximum of AI products to make the experience as easy as possible for the consumer.
IIR: Tell us a little about the short-term direction enabled by the Series D round.
JJ: We’re not going to expand geographically—we’re going to stay in the main geographies we’re in, which is Europe, Asia and the U.S. It’s really about going deeper in every market. It’s about creating more AI products like Underwriting Fraud detection, Subrogation and First Notice of Loss automation. The purpose is to intensively invest in these and create new products that address other pain points or parts of the process that we can accelerate.
IIR: So, with regard to what you said about a “broad vision,” people in the insurance industry should think of Shift as something much more than a fraud detection solutions company?
JJ: Yes, that’s already the case. We already have products we’ve rolled out to customers automating different parts of the claims processes. Today we’re focused on underwriting fraud detection, but also automating decision making at FNOL—is the claim covered, is the description accurate, is there any exclusion, how we send to best repair shop? And then on the back end, are the quotes we received on the invoice relevant, is it consistent with the description of the damage, is it covered, does the provider exist, should we pay it or not?’ We’re creating solutions that automate parts of the claims process, and we’re already live in every geography. When I say automate, it’s about making the actual decisions.
IIR: So not just about fraud but about easing the claims process. Are you becoming a claims system vendor?
JJ: not at all. That’s great question. Not at all. We are creating AI algorithms that integrate with these systems. That’s very clear to the customers we’re working with, and I hope we’re able to make it clear to the industry as a whole. Because when you talk about claims automation, people often think about core systems, but we’re creating a new category of solution that integrates within the core systems and provides AI for automation. It’s the same way we do fraud detection: fraud detection is automating a part of the process, which is checking, ‘Does this claim need review from SIU or claims handlers or not?’
IIR: Shift’s announcement of the Series D funding said the company plans expand into the health insurance sector because it sees a “large opportunity”? How would you describe that opportunity for Shift?
JJ: When we look at the different industries we’re helping to detect fraud, we see that in healthcare there very large volume of fraud we can help the industry detect. We already started testing the product with very good results. When you look at the amount of fraud that’s out there, and when you look at the fact that there are few AI vendors able to detect it, we think we can be a very big help to the industry.
IIR: So you’re deepening market penetration within your existing geographies, focusing on product R&D and expanding to health insurance. Will Shift will remain focused on the insurance industry broadly?
JJ: Yes, 100 percent. We want to become a model vertical software company, the epitome of a vertical software company for insurance.