hyperexponential (hx), the London-based insurtech, today announces the closure of a successful $18m funding round led by the leading growth capital provider Highland Europe. The finance will enable the already-profitable hx to accelerate its rapid growth, as it provides cutting-edge mathematical modelling software for the commercial insurance sector.
hx’s software helps companies build, deploy and update their pricing models, so they can make better data-driven decisions, faster and with minimal time and money spent on IT administration.
hx has created a web-based SaaS platform called Renew that is custom-built to assist actuaries, data-scientists and underwriters who need to build and use models. Crucially, hx’s solutions are:
- Cloud-based – a software-as-a-service model provides immediate access to the tools, as well as scalability as insurers’ needs dictate;
- Agile, configurable and self-service – insurers can manipulate and update their models rapidly and independently as the market shifts around them;
- Exposing open-source technology – the software gives users instant access to the cutting-edge in the rich and growing data science and web technology ecosystems
Amrit Santhirasenan, hx’s CEO and co-founder, said: “The insurance industry is experiencing unprecedented growth, with data and technology being critical strategic drivers. Our software provides the tools that new entrants to the sector need in order to get to market with best-in-class analytics, and the functionality that incumbent insurers require in order to transform.”
Launched in 2017 by Santhirasenan and co-founder Michael Johnson, both software engineers and qualified actuaries with more than a decade of experience in senior roles at leading insurers, hx has quickly established itself as the enterprise modelling provider of choice for the global specialty and commercial insurance sector. With revenues increasing up to threefold each year since launch, hx now employs 30 staff and its insurance client base will this year account for around $50bn worth of premium income.
“We launched hx after working in insurance roles where we could not find the software solutions we now provide,” Santhirasenan recalled. “No-one was offering technology tailored to the needs of the commercial insurance sector; instead, a $700bn industry was expected to use solutions built for other types of financial services.”
By providing a scalable SaaS platform that is purpose-built for the needs of commercial insurers, hx has been able to capture significant market share. It has an international client base that ranges from some of the world’s largest household name insurers, through Lloyd’s syndicates to smaller, innovative start-up insurers and MGAs (Managing General Agents). “For the first time in its history, the commercial insurance sector now has access to agile cloud-based tools built with its specific needs in mind and simple-to-access functionality,” Santhirasenan added.
Having grown organically so far, hx will use the money raised in this funding round to accelerate its growth trajectory. The company intends to scale up its product and engineering teams in order to expand the functionality of the Renew platform and to explore new applications of its platform across the sector. It will also build out a commercial team for the first time, having so far generated strong revenues without dedicated sales staff.
Combined with its track record of profitability, hx’s fundraising puts it in an even stronger position to deliver long-term sustainable growth, built on increasingly rich relationships with its users. Its increased balance sheet strength also gives clients reassurance in a sector where multi-billion pound companies predominate.
hx’s funding round was several times’ oversubscribed, underlining the attraction of the insurtech sector to investors. Highland Europe’s investments range from the file-sharing business WeTransfer to food delivery company Wolt, plus UK digital payments service, Modulr, and fraud prevention company, Featurespace. The company has a track record in supporting highly innovative software-as-a-service businesses, in an area that has seen even more growth as businesses have been forced to accelerate their digital adoption.
Laurence Garrett, Partner at Highland Europe, said: “We believe hx offers a unique combination of actuarial expertise and software engineering knowhow that delivers exactly the tools that commercial insurers need as their marketplace continues to evolve and transform. This is a sector that is changing very rapidly and hx has already demonstrated considerable growth; we want to help them bring their cloud-based tools and innovation to even more insurers and insurtech companies.”